“Speaking at the Federation of American Hospitals convention in D.C., Health and Human Services (HHS) Secretary Alex Azar laid out a series of actions the administration will take that are aimed at lowering health care costs, and warned that it wouldn’t be deterred by powerful special interests.
“Today is an opportunity to let everyone know that we take these shifts seriously, and they’re going to happen — one way or another,” Azar said. “The administration and this president are not interested in incremental steps. We are unafraid of disrupting existing arrangements simply because they’re backed by powerful special interests.”
The administration will make it easier for patients to access their health records, encourage health providers to be more transparent about costs of procedures and services and remove regulations that “impede” innovation. HHS will also “experiment” with payment models in Medicare and Medicaid to “drive value and quality,” he said…
“But there is no turning back to an unsustainable system that pays for procedures rather than value,” Azar said. “In fact, the only option is to charge forward — for HHS to take bolder action and for providers and payers to join with us.” (A)

“In his keynote, Webb first noted the importance of taking disparate data sets in healthcare and turning them into actionable insights that can be used to improve patient care or the patient experience. Webb, who also is the author of The Innovation Playbook, The Digital Innovation Playbook and the best-seller What Customers Crave, contended that there are four pillars of disruption in healthcare: consumerization; disruptive innovation; connection architecture; and economic models. “These pillars will impact everything about your business in the next six years. We used to believe that change was a linear curve, and we are [misled] in believing that change is linear. But it’s not; change is explosive,” said Webb, adding that the depth and speed of change could “sink” some healthcare organizations.
To this end, Webb said that his firm recently interviewed some 130 healthcare executives, asking them on a scale of 1 to 10, how important disruption is to their organization. Amazingly, Webb reported, every single person who was interviewed responded that disruption ranked a “10 out of 10” in importance.
But perhaps just as noteworthy, the executives were then asked to explain what disruption meant—and not a single person was able to do so clearly, Webb said. “Disruption is like a unicorn in [the sense] that nothing too weird has happened yet,” he said. Explaining further, Webb attested that breakthrough innovations are certainly occurring right now in healthcare, but he feels that isn’t the same as disruption. “Disruption means destruction. We are destroying clinical models and patient relationships and replacing it with betterness ran by three things: connection architecture, consumerization and disruption,” he said.” (B)

“Some of the biggest and most famous brands in America are making big bets on health care. The blue chips of Silicon Valley — Amazon, Apple, Google, Uber — have announced in the past few weeks they’re interested in disrupting an industry that has bedeviled us with rising costs and inefficiencies for decades.
Amazon is setting up a mysterious new partnership with JPMorgan Chase and Warren Buffett. Apple is planning a line of (surely sleek and minimalist) medical clinics. Google’s sibling under the umbrella company Alphabet, Verily, is looking at the Medicaid market. Uber wants to disrupt ambulances.
It is way, way, way too early to start imagining a world where health care is truly owned by Big Tech — you order prescription drugs with your Amazon Prime account, see a nurse at the Apple Clinic, get your benefits statements from Google, and call an Uber instead of an ambulance when you need to go to the hospital.
But something is happening here. The most proven, forward-thinking, and, dare I say, disruptive companies in our country have decided health care should be their next big move. They see a system rife with administrative inefficiencies, opaque prices, and customer dissatisfaction. In other words, a huge opportunity.” (C)

“The challenge inherent in building a system that involves healthcare stakeholders—care providers, payers and healthcare consumers—is deciding which areas should be influenced. A unified healthcare ecosystem, however, has but one purpose—to deliver the best, most effective and appropriate care in a cost-effective way to the patient.
Even with today’s many technologies, getting there won’t happen in a day, a month or even a year. It won’t occur by using a single methodology or solitary technology. Interoperability is needed across all healthcare stakeholders to effectively plan, execute and pay for services. The ability to view clinical data internally is deemed extremely important by 70 percent of healthcare executives, and 50 percent of those executives say it’s extremely important to view clinical data externally, according to a new HFMA report. Today, unfortunately, most systems don’t have the ability to talk to one another, which is why it’s so important to support the digital transformation of healthcare.
An effective way to accomplish this imposing task is by converting medical practices to fully digital organizations with the ability to accept and manage financial risk, integrate disparate software systems to improve efficiencies, build value-based care programs and optimize the entire revenue cycle.”…
Making the digital transformation won’t be easy, and most providers will benefit from outside assistance. Organizations that make the successful transitions will be well-positioned after they achieve digital transformation.” (D)

“Organizations need to understand what the umbrella term of AI includes and what to look for in different infrastructure tools that include AI technology. Some tools may contain different AI methods to achieve a certain goal…
IA was created to emulate the human mind and working processes, and can independently solve problems without needing to be programmed to do so. AI can accept new information and learn from it without human intervention.
The computing power behind AI allows it to process information exponentially faster than a human could, fixing problems or drawing conclusions that the human mind would never be able to achieve.
Gartner described AI as applications including autonomous vehicles, automatic speech recognition and generation, and detecting novel concepts and abstractions. Detecting concepts and abstractions is useful for detecting potential new risks and aiding humans to quickly understand very large bodies of ever-changing information.
The potential for AI in healthcare is vast and the technology can be applied from the infrastructure level all the way through treating patients.
“This radical transformation is already underway and is occurring as a response to the increasingly menacing nature of unknown threats and multiplicity of threat agents,”
“Analytics is another example of a patient facing use of AI in healthcare, especially when it comes to using images for diagnostics.
A computer with AI can look at an image of a healthy brain scan and an image of a brain scan with tumors. The device could then recognize the difference between the two images by breaking them down into machine-readable patterns.
The machine can remember and reference these patterns then apply them to future images to determine which patterns indicate that a brain tumor is present.” (E)

“In an environment where consumers are constantly expanding the use of technology in all areas of their lives, healthcare providers are also shifting their services to meet these customer needs. One such way has been virtual care, which has proven effective as a means to expand access and bring greater convenience, while providing quality care and reducing costs.
Virtual care helps increase the efficacy of both in-home and facility-provided management of acute and chronic diseases, promoting efficiency in clinical decision making and treatment recommendations. Technology is not a substitute for excellent clinical care; rather it is a tool which serves to enhance communication and collaboration, ultimately benefiting patients, particularly those in rural and underserved areas.
Virtual care services range from a patient at home interacting with a distant provider for a medical consultation, to the remote monitoring of a patient at home with chronic disease in order to prevent exacerbations, to patients in a hospital or at other facility, who require a specialty clinical consult. Patients can connect via their devices – smartphones, laptops, desktops, etc. – for “on-demand” medical consultation services in areas including urgent care, behavioral and mental health, and other cases with real-time clinical video interaction, often decreasing time and travel for patients.” (F)

“The term innovation loses so much meaning, and one of the meanings that it gets is ‘It’s innovation if it uses products designed by Apple,’” David Asch, MD, executive director at the Penn Medicine Center for Health Care Innovation, said in his keynote address. “Many of us love Apple products because of the design, but I’ve heard too many people say ‘We’re doing innovation because we’re using iPads.’”
Even outside of Apple, the assumption that all innovation needs to be technological is a problematic one.
“I think technology for technology’s sake is a mistake,” Luis Castillo, president and CEO of Ensocare, said on a leadership panel. “If you’re automating a bad process it’s still a bad process.”
Instead, Asch said, innovation needs to be undertaken the way hospitals take on research.
“Innovation is like research,” he said. “It’s hypothesis-driven, it’s falsifiable and it’s highly disciplined.”
One problem that many organizations have innovating is they don’t recognize that step one is to identify the problem.
“Often we are solving for the wrong problem, and if we solved for the right problem we might be in a better position to address our customers’ needs,” Asch said. “Until you identify the problem you fundamentally want to solve, you can innovate in the wrong direction.” (G)

“Regarding recent reports on plans for Amazon, JPMorgan Chase, and Berkshire Hathaway to create a new health care company: Kudos to Jeff Bezos, Jamie Dimon, and Warren Buffett for stepping forward to take on the bloated US health care system.
The challenges are clear: administrative waste, unnecessary treatment, monopoly pricing, inequitable access, and often lousy quality. Less obvious is how to address them.
A good start would be to question widely held assumptions: that current treatments — including drugs — all have been proven safe and effective (safe, maybe; effective, no); that physicians can tell you what’s best for you (they can, but only if they know what is important to you); or that more medical care is always better (it’s not).”
The system is ripe for disruption and new thinking. But it will take a fearless commitment to keeping patients at the center and the profiteers at bay.” (H)

“Organizations with existing innovation centers, and those considering developing them, should consider the following actions which can head off or, at least, reduce the drag on innovation these challenges pose:
– Identify a specific purpose that unifies efforts and engage only in activities which forward it.
– Create forums for project contributors to learn about varying approaches to problem-solving.
– Develop stakeholder co-creation methods and tools which ensure maximum engagement amidst resource constraints.
– Enlist project managers and ensure clear roles and responsibilities for all center employees.
– Set project budgets and scope design projects at the outset to align with funding size and horizons.
– Establish clear initial operational and performance metrics such as percent of innovation concepts expected to be implemented, number of clinicians and patients involved in co-creation processes, types of IP generated, and stage-gated timelines.
– Be prepared to revise metrics as the center evolves and celebrate small wins.” (I)

BIG TECH HAS a lot of problems: fake news, sexual harassment, Russian interference, privacy concerns, and growing fears that too much screen time rots your brain. But even as they struggle to solve these day-to-day problems, the industry’s biggest players are putting more resources into another notoriously hard problem: health care….
Tech companies like Apple are known for creating products that people love. It’s easy to picture the industry creating a better health care experience for patients, and Apple is already hard at work designing new health products and finding new applications for its existing products. It’s researching ways to monitor blood sugar non-invasively and is working with Stanford University to test whether the Apple Watch could screen for irregular heart rhythms. This week, CNBC reported that the company will use new on-campus clinics for employees to test new health products…
The problem is that it’s not enough to just make products that patients love. The products also need to be used by doctors, nurses, and administrators. For example, a company could create a great app for letting patients share their medical data with their doctors. But if the doctor can’t access the data through software approved by her clinic, it won’t help patients. Another problem: if doctors can’t easily track or bill for their time, they may not want to use an innovative app.” (J)

“The odds: Bezos, Buffett and Dimon are big names — big as they come — but the history of health care is littered with business titans who have declared war on health care costs. Amazon, Berkshire Hathaway and JPMorgan Chase may be able to get their own costs down, but that doesn’t mean they can do it for anyone else…
The big picture: Health care costs are not one problem but many: national health care spending, federal health care spending, employer premiums, out-of-pocket costs, and the value of the dollars spent. Each has different constituencies who care about them, requiring different solutions presenting different challenges…
Reducing national health spending is a different goal. What distinguishes the level of GDP we spend on health from other countries is primarily the prices we pay for everything in health care, not the volume or intensity of services we provide. These companies might make a small dent in the prices they pay, but as big as they are, they will not have the leverage to do much beyond that…
What to watch: Perhaps other employers will try to emulate them or buy into whatever they do, but they could be successful and still have almost no impact on national health spending, federal spending, or consumer out of pocket costs.
Nor will they be immune from the forces that have hampered previous efforts. Health coverage is a popular benefit and an important part of any employer’s wage structure; they will go only so far to “disrupt” it…
As intriguing as the recent announcement is, experience suggests keeping it in perspective. (K)

“According to a recent report from Moody’s Investors Services, both for-profit and nonprofit hospitals will face a new threat in the form of greater competition, volume losses and weakened margins as commercial health insurers aggressively continue pursuing growth strategies to reduce cost and increase efficiency.
The ratings agency cites a rise in the acquisition and expansion of outpatient and post-acute services by insurance companies as examples of the increased competition. The result of this trend will be a shifting of patients away from hospital settings and toward lower-cost outpatient settings, reducing hospital volumes and placing future margins at risk.
Moody’s discussed several of the large insurance industry deals announced in recent months, including the plan to merge Aetna (the nation’s third-largest health insurer) and CVS (the biggest drugstore chain). If successful, the new entity will be able to direct members to its own provider sites and shift more care away from hospitals. Further, the new entity would expand on its services. CVS already operates clinics within its retail pharmacies that provide blood drawing and diabetes care.
The report also referenced transactions such as plans by UnitedHealth Group’s Optum to acquire DaVita Medical Group, one of the nation’s largest independent physician groups. Optum has a legitimate presence in six states and owns physician groups in six other states, including New Jersey.
“As Optum and health insurers attempt to move to value-based payment models that emphasize quality over quantity of care, hospitals will see even less volume,” a Moody’s executive stated.
The agency believes that Optum is in a good position to adopt full-risk, value-based contracts since it has many contracts with managed care clients. A physician-centric, full-risk model would give physicians control of the full premium dollar and expenses, instead of hospitals.
“Beyond being vulnerable to losing market share because of potentially being carved out of contract provider networks, hospitals face the risk that insurers will move more quickly to population-based, full-risk contracts.” (L)

“Regarding “The Future of Hospitals” (Journal Report, Feb. 26), hospitals of the future must move health care from the expensive, inefficient and inequitable model we have now to one that truly empowers consumers to manage their own health, wherever they are. We also need to reimagine the roles clinicians will play in the future. While health systems focus on bringing care to patients, instead of patients to care, we must also select and foster doctors to embrace technology, collaborate across disciplines and deliver care with empathy rather than automaticity. Artificial intelligence will provide an opportunity to let the robots be robots. Meanwhile, doctors must be the humans in the room, regardless of where that room is located, or even if it’s virtual.” (M)

“A dentist office for employees in 1919 at the Lord & Taylor store on Fifth Avenue in Manhattan. In the 19th century, many department stores started providing worker benefits that included health clinics, exercise rooms and libraries.
Who knew? But yes, The New York Times reported in 1904 that “small hospital wards are the latest features among the comforts and conveniences of the shops in a big city.”
Long before the announcement in January of a new employee health care partnership among Amazon, Berkshire Hathaway and JPMorgan Chase & Company, America’s department stores, led by John Wanamaker, were introducing an array of free worker welfare benefits — innovations that were sometimes called Industrial Paternalism. Ill or injured patrons were also accommodated.
The initiatives quickly spread to Lord & Taylor, Macy’s, Saks & Company, Bloomingdale’s, B. Altman & Co., Jordan Marsh and other shopping emporiums whose names have passed into mercantile heaven.
The long-forgotten history emerges from articles in newspapers, journals and trade publications and photo archives at the Museum of the City of New York.
Common store services for employees, according to The Times, included pharmacies and emergency rooms to set broken limbs, perform surgery and deliver babies, employee-only lunchrooms, academic and vocational classrooms, sun lounges, vacation camps, libraries, parlors stocked with fine stationery and maid-attended bathrooms with combs and brushes, curling irons, weighing machines and “shoe-blacking damsels.
So Jeff Bezos, Warren Buffett and Jamie Dimon may be onto something with plans for an independent health care company for the U.S. employees of Amazon, Berkshire Hathaway and JPMorgan Chase. Welcome, gentlemen, to the 19th century.” (N)

“Health care is incredibly backward in its use of information and consumer technologies, so it seems ripe for disruption. And, there’s just a lot of damn money in health care,” Levitt said. “There is a potential convergence going on now. Electronic medical records, mobile phones, and wearables have achieved widespread adoption, creating new opportunities.”
It’s way too soon to know where any of this is going. It could be nowhere: Google and Microsoft have talked for years about breaking into health care, with little to show for it so far. Some of these ventures are more theories than concrete plans at this point.
But it’s still worth watching. Because if any industry is in dire need of disruption, it’s American health care.” (C)

(A) Trump’s health chief warns hospital execs about health care costs: ‘Change is coming’, by JESSIE HELLMANN, http://thehill.com/policy/healthcare/376789-trumps-health-chief-warns-hospital-execs-about-health-care-costs-change-is
(B) Healthcare Innovators Dig Deep on Disruption, Digital Medicine at HIMSS18, by Rajiv Leventhal, https://www.healthcare-informatics.com/article/innovation/healthcare-innovators-dig-deep-disruption-digital-medicine-himss18
(C) Why Apple, Amazon, and Google are making big health care moves, by Dylan Scott, https://www.vox.com/technology/2018/3/6/17071750/amazon-health-care-apple-google-uber
(D) HIT Think Why digital transformation is crucial for healthcare providers, by Joel Gleason, https://www.healthdatamanagement.com/opinion/why-digital-transformation-will-become-crucial-in-healthcare
(E) How Artificial Intelligence Can Shape Health IT Infrastructure, by Elizabeth O’Dowd, https://hitinfrastructure.com/news/how-artificial-intelligence-can-shape-health-it-infrastructure
(F) Virtual care is transforming our healthcare system one visit at a time, by Anthony R. Tersigni, https://www.beckershospitalreview.com/hospital-management-administration/dr-anthony-tersigni-virtual-care-is-transforming-our-healthcare-system-one-visit-at-a-time.html
(G) Innovation is much more than just using new tech, by Jonah Comstock, http://www.healthcareitnews.com/news/innovation-much-more-just-using-new-tech
(H) Disrupting health care? Check your assumptions at the door, by Michael A. Cohen, https://www.bostonglobe.com/opinion/letters/2018/03/02/disrupting-health-care-check-your-assumptions-door/sd5cmiPRJCBIVaHNIttIHM/story.html
(I) Putting Humans at the Center of Health Care Innovation, by Yasser Bhatti,Jacqueline del Castillo, Kristian, and OlsonAra Darzi, https://hbr.org/2018/03/putting-humans-at-the-center-of-health-care-innovation
(J) EMBATTLED TECH COMPANIES CHARGE DEEPER INTO HEALTH CARE, by LINT FINLEY, https://www.wired.com/story/embattled-tech-companies-charge-deeper-into-health-care/
(K) Don’t overhype the new health care venture, by Drew Altman, https://www.axios.com/dont-overhype-new-health-care-venture-88b62e53-f56b-4a5e-8ba9-c96266902747.html
(L) Moody’s: Insurers’ Disruptive Growth Strategies Pose Threat to Hospitals, NJHA Newslink, March 5, 2018
(M) Prescriptions for the Hospitals of the Future, Stephen K. Klasko, https://www.wsj.com/articles/prescriptions-for-the-hospitals-of-the-future-1520183980
(N) Attention 1916 Shoppers: The Doctor Is In, by RALPH BLUMENTHAL and SANDRA ROFF, https://www.nytimes.com/2018/03/04/nyregion/in-health-care-for-employees-department-stores-pioneered.html

“Hospitals are disappearing. While they may never completely go away, they will continue to shrink in number and importance….” (A)

“What do Ashton Kutcher(Airbnb), Donald Trump and Travis Kalanick (Uber) have in common? They recognized an opportunity and used it to their advantage. That trend: disintermediation—the opportunity to deliver a product or service to a consumer with higher perceived value than an incumbent’s by changing the fundamental way it is delivered…
Disintermediation is impacting every industry in our economy. Netflix put an end to Blockbuster’s fortune. Amazon and eBay disintermediated traditional retailing. And Instacart, Zirx, PostMates, Caviar, Taskrabbit and others hope to become established names in the fast-growing peer-to-peer economy that served 90 million Americans (44% of U.S. adults) last year.
What do successful disintermediators have in common? There appear to be four shared attributes:
They see unnecessary costs or unnecessary wrinkles in the traditional ways companies do business. They get rid of unnecesssary layers that incumbents view as “essential” and do business a new way.
They leverage online technologies to enhance access and use by their customers.
They are not afraid of retaliation by traditional incumbents. They play long-ball with the support of their investors and boards who see a new marketplace others don’t.
They relentlessly measure and monitor their own performance to maintain a strong value proposition for their customers. They do not believe their own publicity knowing they’re being chased by look-alikes wishing to ride the coattails of their success.
More than consolidation and the Affordable Care Act, disintermediation is the single greatest catalyst for change in the health system….” (B)

“The economic term for what’s happening in retailing is disintermediation—the removal of middlemen from a supply chain or a series of transactions.
Healthcare providers are experiencing their own disintermediation moment. Advancing technology and the growing ability of payers and patients to instantly access information electronically is transforming nearly every corner of healthcare.
The practice of radiology is probably farthest along the disintermediation road. Highly trained radiologists traditionally supervised imaging, interpreted the results and offered advice to the physician who ordered the image.
Today, physicians are using handheld ultrasound devices and loading images into picture archiving and communications systems that can be read anywhere by anyone at any time. Their consulting radiologist may be laboring over a computer screen in Bangalore…
But for providers, it means disintermediation may soon reach a tipping point where once reliable revenue streams have been mostly siphoned away. As in retailing, not all will survive.” (C)

“Triumphant in online retail, cloud computing, organic groceries, and streaming television, Amazon founder and chief disruptor Jeff Bezos is turning his seemingly limitless ambition to health care.
Amazon, launched as an Internet bookseller nearly 24 years ago, has branched into offerings including voice-commanded speakers infused with Alexa artificial intelligence and original TV shows streamed online at its Prime subscription service.
Health care now appears ripe for Bezos, who has earned a reputation for attacking high costs and inefficiencies…
“He has identified a market that is ready for disruption. The healthcare system in the US is ripe for reform.”
Bezos faces the challenge of taming skyrocketing costs throughout US health care from insurance and medicine to supplies and therapy.
“Just as with every other industry Amazon has entered, Bezos is envisioning lower-priced alternatives with frictionless services that could, over time, make a lot of money for Amazon,” Orsini said.
Barclays analysts said in a recent research note on Amazon’s potential in health care, “We are never dismissive of anything disruptive that Amazon is involved in. Amazon arguable has the best technical abilities of any company we cover.”..
Amazon’s pattern of success has caused fear to ripple through sectors it eyes.
When Amazon last year made the surprise buy of Whole Foods, shares sank of major retail chains Wal-Mart and Target.
S&P Global Ratings said in a research note that Amazon “has brought price transparency and convenience to many retail segments,” while shifting consumer expectations, thus creating problems for rivals.” (D)

“Amazon has made a science of cutting out the middleman, eliminating many of the brick and mortar stores that offered similar goods to the internet giant. While there may be good reason to mourn the loss of mom-and-pop bookstores, stores that suffered in the Amazon era, I can find no cause for sympathy for Walgreens and CVS. Pharmaceutical dispensaries such as these are likely to be cut out of a new health care model, with lower costs passed on to the patients themselves. But should you find yourself feeling a twinge of remorse for CEO Larry Merlo of CVS, who took home a cool 18 million dollars in salary last year, no doubt a charity can be established in his name to benefit struggling CEOs.” (E)

“Amazon, Berkshire and JPMorgan can perhaps rope themselves off from this for-profit ecosystem and deliver better, faster and cheaper healthcare for their employees, especially with appropriate subsidies. In other words, if Amazon, Berkshire and JPMorgan behave like the US Federal Government performs in the Obamacare marketplace, it could work. If they stay inside their own ropes, it could stop there. But if the number of covered lives increases to twenty or thirty million, all bets are off. Can it work? Yes. They need to (1) swerve past the huge cash cow in the road (and free up most of that cash for reinvestment back into the network), (2) focus initially on themselves and then (3) enlist other companies and providers into their network. As the network adds other companies (and covered lives) – they will build bargaining power they can leverage. But unless they acquire some meaningful scale, they will never defeat the (profit) force that defines and dominates the US healthcare market. At the end of the day, their joint effort is about a rapid technology-driven demonstrations followed by immediate, incentivized expansion. ..With scale, the Consortium can bargain and reward; without it, the Consortium becomes a self-funded boutique with three customers.” (F)

“Amazon is attempting to transform its medical products business into a major supplier to U.S. hospitals and outpatient clinics that could compete with large distributors. Amazon has reportedly met with hospital executives on several occasions, most recently in late January, to discuss an expansion of its business-to-business marketplace, Amazon Business, into one where hospitals could shop to stock outpatient locations, operating suites, and emergency rooms. Amazon Business already sells a limited selection of medical supplies. The company recently sent employees to a large Midwestern hospital system, where officials are testing whether they can use Amazon Business to order health supplies for the system’s approximately 150 outpatient facilities. The pilot is customized for the hospital system’s catalog of supplies, according to a hospital official overseeing the efforts, allowing employees to compare prices the system negotiates with its distributors against those in the Amazon Business marketplace. Amazon said it is building technology to serve health care customers, and seeking to sell hospitals on a “marketplace concept” that differs from typical hospital purchasing, which is conducted through contracts with distributors and manufacturers. So far, some hospitals have been reluctant to buy supplies from Amazon Business, for reasons including lack of options and lack of control over purchases and shipping, which hospitals closely safeguard to ensure prompt arrival of goods.” (G)

“Deepening its move into healthcare, Amazon is pushing to turn its developing medical supplies business into a major supplier to U.S. hospitals and outpatient clinics, reports The Wall Street Journal…
“1. Amazon Business, the company’s separate business-to-business marketplace, already sells a limited selection of medical supplies — ranging from sutures to hip implants — as well as industrial supplies and office supplies. However, Amazon is hoping to expand this marketplace into one where hospitals could shop to stock emergency rooms, operating suites and outpatient facilities…
3. Recently, Amazon Business sent employees to a large hospital system in the Midwest with roughly 150 outpatient facilities to test Amazon Business as a medical supplier. Essentially, the pilot is testing if the system can effectively order healthcare supplies for all of its facilities. The pilot is customized for the healthcare system’s catalog of supplies and allows employees to compare prices the hospital negotiates with its distributors and the supplies in Amazon Business’ marketplace…
5. Over the past year, Amazon slowly acquired more than 10 wholesale pharmacy licenses from state pharmaceutical boards. The licenses are held in Alabama, Arizona, Connecticut, Idaho, Louisiana, Michigan, Nevada, New Hampshire, New Jersey, North Dakota, Oregon and Tennessee. These licenses are necessary for selling medical equipment to licensed professionals…” (H)

“The online retailer’s plan to enter the hospital supply chain could bring major cost savings for hospitals.
Hospital CFOs are likely to welcome the most recent foray from Amazon into the healthcare market, as it should lead to lower supply costs, second only to labor as a major cost center, an investment banking analyst says.
Distributing medical supplies is so closely aligned with what Amazon already does on a huge scale that this new project is almost certain to threaten existing medical suppliers and distributors, with hospitals and health systems reaping the rewards…
On the heels of announcing a new health plan, Amazon is now looking to become a major supplier of medical products to U.S. hospitals and outpatient clinics, competing directly with suppliers such as McKesson, Cardinal Health, and Owens & Minor, according to a report in The Wall Street Journal.
The move on healthcare’s supply chain seems to bear out analysts’ predictions that Amazon’s threat to shake up the health insurance industry might be only the first step in tearing down other healthcare silos as well.
The company’s entrance into the medical supply chain could bring “massive change,” says W. Robert Friedman Jr., managing director in the healthcare practice of Dresner Partners Investment Banking.
“Hospitals are under tremendous financial pressure due to the reduction in Medicare rates and Medicaid. The major expense for hospitals is the cost of labor but supply is right behind it as a big percentage of their core operations,” Friedman says. “If hospitals can order directly from Amazon, which then ships directly to their distribution outlets, this would be a major transformation in the distribution component of the healthcare industry.” (I)

“Is Amazon about to do to orthopedic device makers and distributors what it did to retail goods?
The report that Amazon has been holding meetings with hospital execs to learn about their needs caused the stocks for companies like Cardinal Health, Inc. and Owens & Minor, Inc. that distribute medical supplies to tumble.
Who Is Threatened?
The threat of Amazon becoming a supplier shouldn’t be a cause for alarm for medical device manufacturers, according to Needham & Company, LLC analyst Mike Matson.
Amazon, in effect, wants to be the new middle man between manufacturers and hospital in a period of disintermediation in healthcare….
Matson writes that Amazon has typically disrupted middlemen much more than manufacturers. In his view, Amazon’s model “may work for ‘lower tech’ products but is unlikely to work with ‘higher tech’ products.” He believes that Amazon, “would simply represent another distribution channel for lower tech products. And with med tech pricing already under pressure, we don’t expect this to intensify with Amazon’s entry.” (J)

“Amazon sells branded over-the-counter medications such as Advil, Mucinex and Nicorette as well as options from Perrigo’s generic GoodSense brand.
Basic Care, Amazon’s recently launched exclusive line of Perrigo OTC health products, is a possible challenge to pharmacy retail chains.
CVS Health, Walgreens Boots Alliance and Rite Aid are losing traffic as people shop for OTC products online, including on Amazon.
Amazon has quietly launched an exclusive line of over-the-counter health products in a possible challenge to pharmacy retail chains that could spark a price war and put pressure on store-brand profit margins.
Technically, the company doesn’t own these products, which are produced by private-label manufacturer Perrigo, but it does put Amazon in a position to squeeze other retailers. The e-commerce giant launched the Basic Care line in August, including 60 products ranging from ibuprofen to hair regrowth treatment.
Pharmacies make money when people walk in looking to grab medicine and end up buying cosmetics and other goods. They’re already losing traffic as people shop for those products online, including on Amazon. Giving them another possible reason to skip the store could hurt even more.
“It’s a very different world, and having Amazon jump in is not a good sign for existing brands, either branded or private label, because the way Amazon works is its ability to take on unprofitable ventures for a time to see how things go,” said Matthew Oster, head of consumer health research at global market research firm Euromonitor International.
“And the fact they have a near monopoly in e-commerce gives them a lot of scale that can allow them to undercut price. So that aspect should be concerning for whoever their competitors are in that space,” he said.” (K)

“…Don’t get too excited. Not even a company as crafty as Amazon, or a bot as all-knowing as Alexa, can fix our nonsensical health care system.
The problem with America’s largely employer-based health insurance system for workers is not something these companies can necessarily fix. The problem is that its basic architecture is upside-down.
The health care system has neither market economics nor budgets to contain costs, so prices go up willy-nilly. To make matters worse, as most working Americans get their coverage through employers, they are forced to re-enroll each time they switch jobs — something people do at least 10 times by the time they are 50, according to the Labor Department, or their employers switch health plans. All of this hurts patients by disrupting the continuity of care and promoting unnecessary doctor-switching.
At the heart of America’s system is the central feature of patient and provider conspiring to spend what is mostly other people’s money. Though that is not unique to America, what is unique is that those other people have virtually no power to set limits.
While providers, such as hospitals and drug companies, often have monopoly or near-monopoly powers, the people who foot the bill are fragmented into thousands of insurance pools run by dozens of insurance companies, all but one of which — UnitedHealth Group — has a national market share in the single digits.
That’s why prices keep going up at rates well above inflation. It’s not a fair fight.
The three companies — particularly Amazon — are known for their ability to disrupt industries. But in health care, they aren’t up against an old-school industry fallen behind the times; they’re facing powerful monopolies or near-monopolies brimming with technology of their own.” (L)

“Blueshift Research thinks Amazon (NASDAQ: AMZN) has the potential to disrupt traditional Rx and medical and dental supply sales and distribution channels in as little as six months if it was to acquire a supply distributor, a mail order pharmacy, or a PBM.
They said a full disruption from Amazon would take two years, however, disruption of the medical and dental supply channels will be much faster due to their higher profit margins and fewer regulatory requirements.” (M)

“The prospect for escalating disintermediation in our industry seems certain. Conditions are ripe. Business schools use case studies to show how incumbent organizations facing disintermediation transformed themselves. In each, the organization was guided by data and facts about their market, reputation, performance, and positioning. They are led by visionary CEOs that see the future and a small team of competent managers focused on execution. They make bold changes with the support of their boards and take friendly fire from insiders threatened by loss of control or change. And they make some mistakes along the way.
Is healthcare ripe for disintermediation? Clearly yes. But are our leaders and boards ready? That’s to be determined. And lest we forget, it’s the consumer, our patients, who will be the ultimate judge of their success and our responses.”(B)

“The burgeoning collaboration between Amazon, JPMorgan Chase and Berkshire Hathaway seeking to transform the American health care system is long on ambition and short on details.
By their own admission, the companies are stepping up to the plate without much experience playing the game, which could easily translate into a swift strikeout.
Any prediction about the alliance’s plans must glean insight from Amazon’s success, which has been based on removing entire layers of product sales and distribution and adopting new ways of thinking. That’s caused massive disruption in the retail and tech industries.
With retail, Bezos refused to travel the well-worn path established by leaders in the business. Victims that failed to adapt, such as bookstore chain Borders, are gone. Others, such as Sears, are teetering.
The lesson for health care? The system you know today won’t necessarily exist in its current form for much longer if Bezos, Buffett and Dimon get their way.
To shake up health care, “it takes bold thinking on the part of thought leaders who are willing to go out there and stake a claim that they will be able to do something grand,” said Jean Abraham, a health care administration professor at the University of Minnesota and former senior economist on health issues for the White House Council of Economic Advisers.” (N))

“Hospitals will also continue consolidating into huge, multihospital systems. They say that this will generate cost savings that can be passed along to patients, but in fact, the opposite happens. The mergers create local monopolies that raise prices to counter the decreased revenue from fewer occupied beds. Federal antitrust regulators must be more vigorous in opposing such mergers…
As these trends accelerate, many of today’s hospitals will downsize, merge or close. Others will convert to doctors’ offices or outpatient clinics. Those that remain will be devoted to emergency rooms, high-tech services for premature babies, patients requiring brain surgery and organ transplants, and the like. Meanwhile, the nearly one billion annual visits to physicians’ offices, imaging facilities, surgical centers, urgent-care centers and “doc in the box” clinics will grow.
Special interests in the hospital business aren’t going to like this. They will lobby for higher hospital payments from the government and insurers and for other preferential treatment, often arguing that we need to retain the “good” jobs hospitals offer. But this is disingenuous; the shift of medical services out of hospitals will create other good jobs — for home nurses, community health care workers and staff at outpatient centers.” (A)

(A) Are Hospitals Becoming Obsolete?, b EZEKIEL J. EMANUEL, https://www.nytimes.com/2018/02/25/opinion/hospitals-becoming-obsolete.html
(B) Is Health care Ripe for Disintermediation?, by PAUL KECKLY, http://thehealthcareblog.com/blog/2016/01/19/is-health-care-ripe-for-disintermediation/
(C) Editorial: Healthcare disintermediation heads for a tipping point, by Merrill Goozner, http://www.modernhealthcare.com/article/20170811/NEWS/170819983
(D) After stunning growth streak, Amazon ambitions seem boundless, https://borneobulletin.com.bn/after-stunning-growth-streak-amazon-ambitions-seem-boundless/
(E) How Amazon Could Succeed in Overturning the Old Healthcare Model, by Aaron Krumins, https://www.extremetech.com/extreme/264130-amazon-succeed-overturning-old-healthcare-model
(F) Amazon, Berkshire & JPMorgan Can Fix Healthcare With Technology – And By Studying Winners, by Steve Andriole, https://www.forbes.com/sites/steveandriole/2018/02/19/amazon-berkshire-jpmorgan-can-fix-healthcare-with-technology-and-by-studying-winners/#1db71ab63a02
(G) Amazon’s latest ambition: To be a major hospital supplier, http://www.pharmacist.com/article/amazons-latest-ambition-be-major-hospital-supplier
(H) Amazon pushes to become a major hospital supplier: 7 things to know, by Alia Paavola, https://www.beckershospitalreview.com/supply-chain/amazon-pushes-to-become-a-major-hospital-supplier-7-things-to-know.html
(I) Supply Chain Is Natural Step for Amazon, Potential Boon for CFOs, by Gregory A. Freeman, http://www.healthleadersmedia.com/finance/supply-chain-natural-step-amazon-potential-boon-cfos
(J) AMAZON, ORTHOPEDICS AND DISTRIBUTION DISRUPTION, by Walter Eisner, https://ryortho.com/breaking/amazon-orthopedics-and-distribution-disruption/
(K) Amazon has quietly launched an exclusive line of over-the-counter health products, by Angelica LaVito, https://www.cnbc.com/2018/02/20/amazon-has-quietly-launched-an-exclusive-line-of-over-the-counter-health-products.html
(L) Alexa, could health care be fixed?, https://www.usatoday.com/story/opinion/2018/02/20/amazon-berkshire-hathaway-jpmorgan-chase-cure-editorials-debates/301127002/
(M) Amazon (AMZN) Could Disrupt U.S. Healthcare System in as Little as Six, https://www.streetinsider.com/dr/news.php?id=13850015&gfv=1
(N) How Amazon, JPMorgan, Berkshire could transform American health care, by Nathan Bomey, https://www.usatoday.com/story/money/2018/02/25/amazon-jpmorgan-berkshire-health-care/350625002/

“Rising costs, growing consumerism and heightened government scrutiny have created a cocktail of forces that leave the healthcare industry “ripe for disruption,” according to a new S&P Global Ratings report.
Amazon, which last year upended the supermarket industry with its purchase of Whole Foods Market, could seize market share from medical supplies distributors such as McKesson and Cardinal Health with its announcement this week it will expand efforts in that market and is in a pilot with a major hospital system. However, serious erosion could take time due to long-term relationships between buyers and existing distributors.
The e-commerce behemoth could spark mergers and acquisitions among healthcare companies vying to survive in an increasingly competitive and unstable environment. For example, there’s been speculation that the CVS Health-Aetna merger was prompted by Amazon’s apparent interest in entering the pharmacy business.
Tulip Lim, an S&P Global Ratings credit analyst, said in a statement that “while ripe for disruption, the industry’s complexity will govern the rate of change.”” (A)

“However, the Byzantine nature of the nation’s $3.3 trillion healthcare sector will also determine the pace of that disruption.
“Given the sheer complexity of healthcare and its importance to our economy, change doesn’t really come fast,” Shannan Murphy, director of Corporate Healthcare Sector for S&P Global, said in a conference call Thursday.
“That said, we do think that change is coming slowly but surely, and certain elements of healthcare are more or less ripe for near-term disruption,” Murphy said….
“All three companies are likely self-insured so they could try to tackle ancillary insurance services such as PBM,” said Tulip Lim, director of S&P’s corporate healthcare ratings. “This could help Amazon, especially if they wanted to get into the area of prescription drugs.”
“But it’s probably more likely that they would buy a PBM rather than build one, because operating a PBM requires certain competencies outside of the three’s core, such as formulary management,” she said.
The sectors most at risk for disruption are distributors of lab and medical supplies, but that comes with caveats.
“Even though Amazon is an e-commerce powerhouse, it might take a while before they take meaningful shares from certain rated players,” Lim said. “That’s because many of these companies cater to the acute-care market, which will be slower to buy meaningfully from Amazon.”” (B)

“How the Chase/Amazon/Hathaway partnership will take shape is still to be determined; my guess is an integrated HMO, like California’s Kaiser Permanente, for salaried employees. This is because these mega-employers no longer want to spend the exorbitant amount of money required to insure their employees in the private market and reckon they can do a better job building and financing health care with their own internal system.
Some corporations used to have a company doctor. JPMorgan Chase wants a corporate health insurance company.
But this plan does little to help people who aren’t bankers for Chase or coders for Amazon.
This is the future of American health care the Amazon/Chase/Hathaway corporate collaboration portends. Your access to service is dependent upon whether you were lucky enough to be born rich, fortunate enough to live in an urban area or skilled enough to be in demand as an employee.” (C)

“Some say that a skeptic is merely an optimist with experience.
One person who fits that bill is Alan J. Burgener, a full-time skeptic and provocateur who is one of the smartest and most insightful healthcare leaders I have encountered over several decades…
“You can color me skeptical when it comes to the prospects for transformational change in healthcare delivery in the U.S. I’m now old enough to have lived through the breathless hype associated with the introduction of Medicare’s DRG-based payment system in the mid-1980s (the first in a career-long string of developments that promised to change healthcare as we know it); the gatekeeper HMO era; the capitation/risk-based contracting era; the primary care practice acquisition frenzy; the hospital merger/acquisition era (join a big system or you won’t survive); the integrated delivery system craze (everyone should look like the utopian Geisinger or the Cleveland Clinic); the volume-based to value-based purchasing era; and the most recent push for quality, outcomes and population health as drivers of provider change.”..
“The people who get all worked up about the transformative effect of each new initiative, like the Amazon-Berkshire Hathaway-JPMorgan venture—most of whom are consultants and/or pundits—have a strong self-interest in keeping hospital leadership on edge and therefore in perceived need of the wisdom of the so-called experts. The fact is, the only things that demonstrably contribute to long-term success in healthcare organizations are the extent to which senior executives go to work every day focused on these five questions:
What can we (meaning my organization) do to improve the quality, outcomes and safety of the care we provide?
What can we do to improve the efficiency and effectiveness of clinical processes in order to lower the cost of care and be better stewards of scarce resources?
What can we do to enhance the experiences our patients and families have when they seek our services?
What can we do to improve the health and well-being of the broader community we serve, whether that be a neighborhood, city or state?
What can we do to make our organization a more stimulating and vibrant environment for everyone who works here?” (D)

“On one side is UPMC, a health system that built its brand on cutting-edge research and university-affiliated hospitals. On the other is Highmark Health, best known as one of the country’s biggest health insurers.
They could be mirror images of each other, flipped upside down. UPMC started out in the hospital business, then created its own health insurance plan and built a $20 billion-a-year enterprise. Highmark, which reported $18.2 billion in revenue last year, announced in 2011 that it would branch from insurance into hospitals….
The competitive clash has turned Pittsburgh into a testing ground for forces that are transforming health care nationally, as waves of consolidation blur traditional boundaries in the $3.3 trillion health-care system…
“I call it ‘the war,’ ” said Sue Kerr, 47, a Highmark member with a UPMC doctor who is frustrated by a transition that she says neither company has made easy. “You should consider switching providers, switching insurances — switch this, switch that. I was like, ‘We paid for this.’ ”…
From his corner office atop the U.S. Steel Tower, UPMC chief executive Jeffrey Romoff is building an empire.
“There’s nothing in health care, that we know of, that UPMC doesn’t have an entry into that marketplace,” he said, comparing UPMC to the tech giant Amazon….
“In the midst of it, it was disruptive. ‘Oh, they were at each other’s throats’ — and that’s the way it appeared,” Romoff said. “But that’s what disruption is about. And let’s be clear about this: Without disruption, change is much, much slower.” (E)

“A consortium between companies with complementary capabilities and scale has the potential to optimize the matching of supply and demand within healthcare via new mechanisms (i.e., exchanges), the facilitation of easier transactions (including faster, multichannel delivery), and new products (such as wellness and healthcare bundles). And as a consortium begins to target health spending successfully, it could move from lower to higher clinical complexity and from local to national marketplaces.
With costs continuing to rise far above the pace of inflation, employers are beginning to take direct action to deliver greater value.
Accordingly, we see three classes of potential plays for a consortium of companies that band together, ranging from the least disruptive (and quickest to implement) to the most disruptive (with the longest time to implement). They are incremental innovation (testing the waters with gradual and piecemeal innovation); technology and analytics (enabling the improvement and redesign of the existing system); and radical disruption (creating new platforms, marketplaces, and ecosystems).” (F)

“Triumphant in online retail, cloud computing, organic groceries, and streaming television, Amazon founder and chief disruptor Jeff Bezos is turning his seemingly limitless ambition to health care.
Amazon, launched as an Internet bookseller nearly 24 years ago, has branched into offerings including voice-commanded speakers infused with Alexa artificial intelligence and original TV shows streamed online at its Prime subscription service.
Health care now appears ripe for Bezos, who has earned a reputation for attacking high costs and inefficiencies.
A possible step in that direction was taken last month, with Amazon announcing an alliance with billionaire Warren Buffett and JPMorgan Chase chief executive Jamie Dimon to provide a health care system for employees of the three companies.
According to the Wall Street Journal, Amazon would also like to become a supplier of medical equipment for hospitals.
“I think Bezos is methodical and thoughtful,” eMarketer senior analyst Patricia Orsini told AFP.
“He has identified a market that is ready for disruption. The healthcare system in the US is ripe for reform.”
Bezos faces the challenge of taming skyrocketing costs throughout US health care from insurance and medicine to supplies and therapy.
“Just as with every other industry Amazon has entered, Bezos is envisioning lower-priced alternatives with frictionless services that could, over time, make a lot of money for Amazon,” Orsini said.
Barclays analysts said in a recent research note on Amazon’s potential in health care, “We are never dismissive of anything disruptive that Amazon is involved in. Amazon arguable has the best technical abilities of any company we cover.” (G)

(A) Healthcare industry ‘ripe for disruption,’ S&P Global warns, by Meg Bryant, https://www.healthcaredive.com/news/healthcare-industry-ripe-for-disruption-sp-global-warns/517254/
(B) Amazon Primed to Disrupt Healthcare? Not So Fast, by John Commins, http://www.healthleadersmedia.com/leadership/amazon-primed-disrupt-healthcare-not-so-fast
(C) Faust: Don’t let Chase or Amazon control your health care, by Timothy Faust, https://www.houstonchronicle.com/opinion/outlook/article/Faust-Don-t-let-Chase-or-Amazon-control-your-12616545.php
(D) Hospital Impact—A skeptic’s view of healthcare transformation, by Kent Bottles, https://www.fiercehealthcare.com/hospitals/hospital-impact-a-skeptic-s-view-why-healthcare-so-difficult-to-disrupt
(E) Two visions for the future of health care are at war in Pittsburgh, by Carolyn Y. Johnson, https://www.washingtonpost.com/business/economy/two-visions-for-the-future-of-health-care-are-at-war-in-pittsburgh/2018/02/13/d987433c-0157-11e8-9d31-d72cf78dbeee_story.html?utm_term=.a9e4be15b3b5
(F) Alexa, What’s Going on with Healthcare?, by Jay Godla, Igor Belokrinitsky, and Sundar Subramanian, https://www.strategy-business.com/article/Alexa-Whats-Going-on-with-Healthcare
(G) After stunning growth streak, Amazon ambitions seem boundless, https://borneobulletin.com.bn/after-stunning-growth-streak-amazon-ambitions-seem-boundless/

“Three corporate behemoths — Amazon, Berkshire Hathaway and JPMorgan Chase — announced…that they would form an independent health care company for their employees in the United States.
The alliance was a sign of just how frustrated American businesses are with the state of the nation’s health care system and the rapidly spiraling cost of medical treatment. It also caused further turmoil in an industry reeling from attempts by new players to attack a notoriously inefficient, intractable web of doctors, hospitals, insurers and pharmaceutical companies.
It was unclear how extensively the three partners would overhaul their employees’ existing health coverage — whether they would simply help workers find a local doctor, steer employees to online medical advice or use their muscle to negotiate lower prices for drugs and procedures. While the alliance will apply only to their employees, these corporations are so closely watched that whatever successes they have could become models for other businesses.” (A)

“The companies said their project will focus on technology that provides simplified and transparent care. Based on the executives who have been named to top roles at the new company, Jefferies & Co. analyst Brian Tanquilut said there is a good chance it will eventually try to negotiate prices directly with health care providers like hospitals, bypassing companies that act as middlemen. That could reduce costs in the medical and pharmaceutical supply chains.
“The initial plan for the new entity will be on partnering with and/or acquiring various consumer-orientated health care technology capabilities (i.e. a venture capital strategy) and eventually using them to influence and incentivize health care cost-reducing behavior,” he said, basing his speculation on the executives picked to shepherd the new company along.” (B)

“Techno-utopian visions of algorithm-driven health-care apps and artificial medical intelligence robots aside, the most important components of the still-theoretical project are actually deeply rooted in the history of health care, both in the United States and around the world. This history illustrates the potential promise of the new initiative: It might provide cheaper, better care for all Americans while facing fewer political hurdles and requiring fewer jarring changes to the system.
Notably light on details, the announcement offered two specific components beyond its emphasis on technology. (Amazon chief executive Jeffrey P. Bezos also owns The Washington Post.) First, the new company would be “free from profit-making incentives and constraints.” Second, the overall goal would be “improving employee satisfaction and reducing costs.”
This first component is the more newsworthy one, as well as the one most likely to revolutionize American health care. Abandoning the profit motive in health insurance would be a notable break — by three of America’s leading companies no less — from nearly a half-century of corporate and conservative ideology that has maintained that free-market profit incentives are the best means of achieving efficiency and cost reductions in health care (and most other economic spheres).” (C)

“Clearly the cost of care has produced a tipping point. It might be just becoming too much—costs are so onerous and unsustainable that they can’t look the other way,” Gartner analyst Barry Runyon said. “We can’t afford healthcare. Normal middle-class people go into bankruptcy with one bad illness.”
Experts agree that the accelerated attempts to disrupt the industry by slashing costs are noble and innovative. But they disagree as to whether the companies—be it Amazon and friends or CVS and Aetna—can succeed in influencing healthcare pricing.
While acknowledging that costs need to be reined in, healthcare leaders point to larger societal problems that often end up on their front doors and have a ripple effect across the system.
“It’s important to keep in mind that the bulk of healthcare problems—and costs—stem from lifestyle behaviors and social circumstances,” Michael Dowling, CEO of Northwell Health, said in an email responding to questions about the Amazon-JPMorgan-Berkshire venture. “I would like to see some of these companies go into poor neighborhoods and try to figure out how to address health issues stemming from poverty, lack of jobs and all the negative social circumstances that contribute to chronic illness, substance abuse and health disparities in this country. That’s the biggest challenge. ” “ (D)

“Those who’ve been engaged in the struggle to find the true cost of healthcare have been working for years with limited success. Oftentimes, they have difficulty getting data from health plans or medical care providers.
“Resistance to transparency in healthcare remains high,” says Network for Regional Healthcare Improvement CEO Elizabeth Mitchell, who welcomes Amazon, Berkshire and JPMorgan’s new company. “Employers who pay for this care still don’t have insight into the relative value of what they are buying. They are looking for a way to have assurance that they are paying a fair price for a high-quality service.”
The Network for Regional Healthcare Improvement has long said any health reform effort needs to look closely at transparency because data that reveals the total and true cost of care is difficult to find. In a report last year, NRHI said health spending by U.S. commercial insurers can vary by $1,000 or more per year per patient, depending on where enrollees live.
The potential for the Amazon-Berkshire healthcare company to disrupt the way health plans do business is one reason shares of many healthcare companies tumbled Tuesday after the partnership was announced.” (E)

“The U.S. health care industry might be seeing the early signs of major shifts such as employers exerting pricing power to rein in costs; the aggressive use of technology such as drones and databases to predict, diagnose and treat diseases; and, consequently, an upending of the bargaining power of providers such as hospitals, physicians and pharmaceutical companies. All those and more are expected to come from a health care alliance announced last week by three heavyweights – Amazon, Berkshire Hathaway and JPMorgan Chase, led by their respective CEOs, Jeff Bezos, Warren Buffett and Jamie Dimon.
“They are acting as customers of health care on behalf of their employees and they are saying, ‘We finally have to get our act together and do something serious,’” said Robert Field, Wharton lecturer in health care management who is also professor of health management and policy at Drexel University. “[However,] the big question is: Will they develop something that’s scalable and transportable? If not, they will undoubtedly accomplish great things for their employees. But it will pretty much stop at that.”
Field predicted the alliance will use technology to dramatically change the way health care is delivered. “This is going to move us closer to more technologically focused health care, from drones dropping our prescriptions at our door to artificial intelligence algorithms spotting disease trends and large databases helping to diagnose you and treat you,” he said. “We’re going to lose the personal touch in health care, but perhaps we need to be going in this direction. We don’t have the corner bookshop the way we used to, and we don’t have a corner pharmacy the way we used to. Health care is going to go there one way or another.”
Wharton management professor John R. Kimberly said he wasn’t sure if the new company the trio plans to set up would be successful in lowering health care costs. “In theory, it could potentially [lower costs and improve access] for their employees,” he said. “[But] in practice, [those effects are] not so clear, even for their employees.” The three companies have a combined workforce of a million employees.
According to Kimberly, the big question is the likely impact on the larger health care industry. He identified at least two avenues of potential impact. “First is the impact of whatever models/arrangements the troika is able to develop, implement and spread to the larger market. Second is the kinds of second- and third- order effects the troika might have on the industry as a whole.” (F)

“This latest move has engendered robust debate. Proponents liberally term it “disruptive,” seeing a natural diversification opportunity for the company that has aspired to be “earth’s most customer-centric company.” Meanwhile, skeptics highlight Amazon’s lack of expertise in health care, a sector that many deem curiously resistant to the competitive forces that characterize the retail and web services markets in which Amazon has thrived. Given this state of affairs, it is worth thinking about Amazon’s efforts in a conditional manner: If Amazon succeeds in changing health care, how might it do so? (Disclosure: I own a very small number of Amazon shares.)
While Amazon’s collaboration with Berkshire Hathaway and JP Morgan Chase would obviously leverage the purchasing power of three massive employers and could lead to innovative insurance models, it seems that the bigger opportunity would be in improving how care is delivered to patients. At its root, health care is a service that needs to be delivered to a customer. For existing health care companies, the operative words in that mandate have been “health care”; for Amazon, the operative words likely are “service that needs to be delivered to a customer.” To the extent that Amazon’s perspective is correct, it is worth considering the types of experience the company could apply to health care.” (G)

“One viewpoint, published yesterday by Harvard Business School professor Robert Huckman, explored ways Amazon’s strengths might help it become a health care power. You can read Huckman’s essay in full on the Harvard Business Review’s site; here’s a summary of some of his points:
• The company that brought you one-click ordering could streamline health care processes too, bringing its reach and focus on convenience to the marketplace: Its “expertise could be used to improve health care delivery by addressing the administrative hassle and scheduling challenges faced by patients seeking routine services in a one-stop setting,” he wrote.
• Its work on frictionless commerce could greatly reduce overhead in an industry known for massive and complex data entry requirements. Some hospitals, Huckman noted, are already investing real-time patient tracking that could give them useful information about patients.
“These pieces of information, all of which are collected by the simple movement of people and equipment through established workflows, can be helpful in improving operational execution for the complex services provided in many health care settings,” wrote Huckman.
• Amazon already knows a ton about consumer purchasing decisions. Could it turn its analytical expertise to patient information? It might, for example, plumb a “wealth of integrated data that links an individual’s medical record with their overall purchasing patterns, genetic information (particularly if Amazon eventually does blood draws in convenient settings), and activity patterns,” he wrote.” (H)

“With all of its technology and unique advancements, the United States sucks at healthcare. The real problem with Obamacare is that it does not fix the “suck” part or the cost part — it just shifts where the bill goes.
So, a whole bunch of U.S. citizens, myself included, now are paying more and getting less coverage. That is neither any way to get re-elected nor any way to run a country. Typically screwing your constituents does not work well for elections, and that played a much bigger role in the last election than most realize (or want to admit).
I think Jeff Bezos gets this — it’s not rocket science. He likely understands that if the government really is not going to step up (it still is arguing over who pays, not the amount on the bill) then a heavy-hitting corporation must.
Amazon has the reach and capability to reduce healthcare costs massively through better records management; implementation of aggressive artificial intelligence-based diagnoses or diagnosis validation; ability to negotiate better drug prices; scalable AI-based patent monitoring; and policies that could address abuses, such as the overuse of painkillers, more effectively.
Individual benefits would include better and more comprehensive access to medical records; programmatic analysis of those records, triggering proactive medical procedures; more aggressive health monitoring; and far broader access to emerging medical technology and drugs.
Amazon has the capability both to lower healthcare costs and raise performance, so that Americans no longer would be paying the most for healthcare while being outranked in performance by 72 countries whose citizens pay less, often far less.” (I)

“A new report from the financial research firm Leerink, which has been closely covering Amazon’s moves in health care, says Amazon is expanding the team that’s exploring a move into the pharmacy business.
Researchers at Leerink interviewed an anonymous former senior Amazon employee, who described an exploratory team at Amazon that was once 7 to 8 people, and is now 30 to 40.
The goal appears to be to ensure its customers stay loyal and that all their needs, including health and medical, are serviced on Amazon.com.
Amazon’s entry into the pharmaceutical business seems inevitable to many in the health sector, particularly in light of the $3 billion market opportunity, and Leerink thinks it’s a matter of “when,” not “if.”
“Ultimately, Amazon is looking to bolster its Prime membership program, which by signing up for a subscription provides customers with benefits including free shipping, expedited delivery, and other perks,” the report states.
“Amazon saw the inclusion of pharmaceutical drugs as a natural add-on to its existing product offerings.”
Amazon CEO Jeff Bezos has eyed the pharmacy business for years, dating back to an investment in the startup Drugstore.com in the 1990s. That business was eventually acquired by Walgreens, and later shuttered.
“The specialist indicated that Amazon’s decision to enter pharmacy has been in the works for some time,” the report reads.
As CNBC has reported, Amazon has been busy in the last year meeting with folks across the industry, including generic drug makers, to figure out how it can break into the space.
The consumables team, led by Eric French, initially kicked off the research process. That team also includes the company’s groceries product. In May, the company started interviewing for a pharmacy general manager to lead the team, and it has been looking to recruit health experts for months — most recently, a health privacy lead. Amazon held exploratory talks in November with generic-drug makers like Sandoz and Mylan.” (J)

“While it appears Amazon’s plans to create a healthcare company aren’t fully formed, the use of data and digital tools are two likely priorities moving forward, according a Wall Street Journal report.
The news outlet obtained a document from December that outlined an initial proposal for a joint venture between Amazon, JPMorgan Chase and Berkshire Hathaway that was officially announced by the three companies on Tuesday. Although industry experts speculate the new business would take over health insurance and pharmacy benefits for employees of those companies, one source told the Wall Street Journal that idea is no longer on the table.
But the document does spell out a clear interest in data and new digital health gadgets. Part of the plan includes an initiative to create a healthcare data warehouse. The companies also want to partner with healthcare systems to use technology to care for patients outside of the hospital, along with digital tools that facilitate data sharing.
Those aren’t particularly innovative concepts in the healthcare world. Telemedicine adoption is on the rise and health systems are already investing in digital tools to streamline patient care. But Amazon’s market power, combined with its tech prowess, could be a driving force for more widespread adoption—similar to the way Apple’s foray into medical records is viewed by some as a sea change for better patient access to health data.
Greg Caressi, transformational health senior vice president at Frost & Sullivan, sees this as an initial step that could lead to broader participation in the healthcare market.
“Companies who are financially responsible for their employee’s healthcare and need a healthy and productive workforce to remain competitive, are searching for answers and looking to innovate beyond the current health system approaches,” he said in an email to FierceHealthcare. “This is an example of innovative companies combining to create new models to address health care and health system issues that impact their business. They are disrupting the system to meet broader goals, which will advance change in a slow moving ecosystem.” (K)

“Large employers have the resources to hire human resources professionals and benefits consultants to shop for their health plans. At least theoretically, those people should know more about how to pick a good health insurance plan that will serve the needs of the company’s workers. And the bigger the companies, the more they can pay to hire people really good to do that work, since their salary gets split many times over.
Have employers used these advantages to find huge savings? Not over all. Employer health insurance tends to be more expensive than public insurance, and its growth has traditionally followed the trajectory of other parts of the health industry. Some employers simply select from standard offerings, essentially outsourcing any innovation potential to notoriously risk-averse insurance companies.
But there is also a robust history of employer experimentation. Some employer ideas have paid off — and spread. Others have flopped. Amazon and friends would be building on this tradition.
Arnold Milstein, a professor at Stanford Medical School, spent several years with the benefits consulting firm Mercer developing unconventional benefit products with companies.
There is a segment of them that is willing to take the same risk tolerance that characterizes their core business and move it into the health benefit space,” he said, noting that many employers “are pretty wary, but there is a subset that has been more bold.”
There have been less successful innovations. Workplace “wellness” programs, which provide financial incentives for lifestyle changes, were initially built and bought by employers. But a growing body of evidence suggests they haven’t delivered much in the way of results.
Amazon, Chase and Berkshire Hathaway have said they’re experimenting with new health care models for their workers. If they crack the notoriously hard nut of high health care costs, we can thank the country’s weird and unloved employer health system for their discovery.” (L)

“Last week’s announcement that Amazon, Berkshire Hathaway and JPMorgan Chase will collaborate on a new venture to provide simplified, low-cost, high-quality health and wellness care for their more than 1 million employees caused a sell-off for many healthcare stocks and captured the imagination of pundits.
However, this new company is just the latest in a series of mergers and collaborations that many believe could disrupt healthcare in the United States. And the industry has for years seemed ripe for disruption. In 2017, $2.7 billion was invested in healthcare equity deals to develop tools to remake health and wellness for consumers, providers, hospitals, insurers, post-acute care settings and medical researchers, according to the New York Times.
These new alignments have included organizations like the Cleveland Clinic and Oscar, Humana and Kindred Healthcare, and a consortium of health systems that are forming their own nonprofit drug manufacturer.
Proponents of such initiatives believe that blurring the lines between what traditionally have been distinct sectors (providers, health plans, retail pharmacy and employers) will allow innovative approaches to emerge that will ease the transition from fee-for-service to value-based healthcare.
However, other healthcare leaders caution that many well-known companies have attempted to disrupt the American clinical delivery system and failed, according to another Times article. They also point out that most disruption in other industries occurs with lower-value, lower-cost products, and note that consumers don’t want to settle for low-value healthcare.
Still, that doesn’t mean healthcare organizations should ignore the winds of change. Consider the fact that since 2000, 52% of the companies listed on the Fortune 500 have gone bankrupt, been acquired, or ceased to exist, according to Constellation Research.
Indeed, the same forces that have affected other industries in the United States also apply to hospitals, and yet many hospital executives continue to lead as though nothing has changed. At a time when the core inpatient business for hospitals is declining and technology offers the ability to migrate care away from centralized hospitals, hospital executives must make sure that there is a place for their organization in the new world order of clinical care delivery.
The proposed vertical merger of CVS and Aetna represents a major challenge for all hospitals located in cities where CVS has its 9,700 retail pharmacies and 1,100 walk-in clinics. By combining organizations from different parts of the healthcare industry, the new company can realign incentives to benefit the consumer. If the new CVS can use its pharmacy benefit manager to lower prescription prices and encourage the use of less expensive drugs, the health insurance division could lower premiums so that enrollees could afford to visit their walk-in clinics to access care.
This development poses a challenge to competing hospitals because they have been making up for declines in inpatient reimbursements by raising prices in the outpatient clinic. It is hard to see how community hospitals will be able to compete with the likes of CVS and Amazon when Medicare, Medicaid and commercial health plans are cutting rates for outpatient care…
Hospital leaders must seriously consider how they will respond to competition from the innovative organizations that will emerge from mergers and collaborations. Following the same old playbook will not suffice. Executives must make hard decisions about what services they will no longer offer and how they will convince their communities that they offer value that can be measured in a rapidly changing health and wellness environment.” (M)

“The unanswered questions: There are a lot.
Will this involve new experiments, or rely on ideas — like direct contracting with hospital systems, or reference pricing — that already exist?
Are they just trying to cut out the middlemen? Most companies this large already are self-insured — meaning the companies pay for their employees’ medical costs on their own and hire health insurers to carry out the back-end work.
How will this company be different from the numerous other employer coalitions that try to band together for better deals? Amazon and JPMorgan are already part of the National Business Group on Health, and one of Buffett’s companies, BNSF Railway, is part of the Health Transformation Alliance — which so far hasn’t done a whole lot.
“We’ve seen so many employer coalitions trying to leverage their purchasing power,” Levitt said. “Those tend to go nowhere in really addressing the fundamental health care cost growth.”
What technology is actually involved? Amazon reportedly has interest in distributing prescription drugs. Will JPMorgan want to get in on the fees from managing health savings accounts? How do Buffett’s companies fit in?
Health care is literally a matter of life and death, and therefore is heavily regulated. Any new company looking to make a dent in health care costs will have to navigate a thicket of state and federal rules.
Will this end up like another Kaiser Permanente, a health insurer that uses its own closed system of hospitals and doctors? This is doubtful for now, but Kaiser Permanente started out as a workers’ comp program for shipyard and construction workers.” (N)

“Cigna CEO David Cordani said he’s confident the insurer will get a piece of Amazon, Berkshire Hathaway and J.P. Morgan’s new health initiative to tackle health costs, but investors aren’t convinced.
Cigna shares fell as much as 4 percent in trading Thursday and were recently down more than 2.5 percent for the day and about 10 percent for the week.
On Tuesday, J.P. Morgan and its partners announced plans to form a venture aimed at lowering its employee health costs. Since then, investors have been concerned that Cigna will be squeezed on pricing for its services or lose business. The company currently insures about 20 percent of J.P. Morgan’s employees.
“We’re one of J.P. Morgan’s service partners, so we have ongoing dialogue with J.P. Morgan on a regular basis,” including this week, said Cordani in an interview on CNBC’s “Squawk Box.”
“We do see this as an opportunity, and we’re in the middle of that conversation, as you would expect,” he said.
The three large employers said this week that they are hoping to form a separate entity to handle benefits “free from profitmaking incentives,” in order to lower health costs and improve service for their workers. Cordani pushed back on the profit implications on the company’s earnings conference call.
“We should not view that an industry with medical cost trend (growth) of 5-6-7 percent as sustainable,” said Cordani, while pushing back on the notion that insurer profits drive those increases.
“Our industry is capital intensive … This is not going to get solved with extracting a couple of points out of the (profit) margin,” he said.” (O)

“Given all this, surely the combined efforts of these three behemoths should yield some interesting innovations, right? Actually, don’t hold your breath, responds Harvard health care policy expert Bob Laszewski on his blog.
Why is longtime industry insider Laszewski so skeptical of the companies’ efforts? First and most basically, because this is far, far from the first time big companies have promised to finally bring some sense to America’s crazy health care situation.
“I have seen this movie before. Dozens of times over the last 25 years,” Laszewski writes. “The first time was when the leading employers in the Minneapolis-St. Paul market began the same effort in the early 1990s. That, and any other such initiative I have seen over the decades, went essentially nowhere.”
But it’s not simply that Laszewski is a jaded, been-there-done-that industry veteran. He’s also got specific reasons to be skeptical of Amazon and friends’ efforts. Their approach, he explains, is to use data to give patients and providers more information and reduce the amount of medical care people consume, or, in the lingo of the industry, “utilization.”
It’s an approach experts have been pursuing for years, Laszewski explains in his jargon-heavy post, but it’s yet to yield significant returns.
Why? Because despite the hype (and my father’s endless grumbling about unnecessary tests and scans every time he sees a doctor), the main trouble with American health care isn’t how much we consume. That’s not significantly different from other wealthy countries. The problem is how much we pay for that health care.” (P)

“The moves by these new entrants signal the continuing desire of large companies — many from outside health care — to transform the U.S. health industry, which most view as rife with inefficiencies, unsustainable costs and unhappy customers…
The U.S. health industry is in the midst of a slow but seismic shift fueled by consumerism, a move toward paying for value instead of volume, technological advances, care decentralization and growing interest in wellness…
Employers, consumers and the market in general appear to be losing patience with traditional players, which have largely continued to tread their well-worn paths.
And the more significant question may be: Will any of this result in a less expensive health system? Put another way, when you invest to create a new health model, will the model have less expensive inputs and components or just re-create the existing system and costs?…
Challenges surely lie ahead for these companies’ ambitious projects, whether they are new entrants or legacy healthcare companies building new partnerships. But the industry seems to have reached a tipping point. We are likely to continue to see powerful players taking serious actions to try to fix a system that has so far failed to do much more than tinker around the edges.” (Q)

“Jeff Bezos’ Amazon delivers stuff to your door. Jamie Dimon’s JPMorgan Chase makes money by investing. Warren Buffett’s Berkshire Hathaway sells everything from Dairy Queen dip cones to Helzberg diamonds. They’ve also rattled Washington and the country’s health care industry by declaring they would form an independent health care company for their employees.
But what makes these three titans of American industry and ingenuity think they can do better than the current players to deliver health care efficiently and affordably to more Americans? Don’t we have government to engineer health care? Oh, wait, Obamacare, with its soaring costs, shrinking networks and unkept promises.
The three business leaders have no experience in the complex health care sector. So what? We’ve learned from a decade of wrangling over Obamacare that Washington isn’t proficient at making health care accessible and affordable.
We hope the three executives and their companies deliver something that government doesn’t: innovation that works on time and within budget. Nimble strategy tailored to individual needs. Efficient execution.
Bezos and Friends join an increasingly crowded field of entrepreneurs and execs trying to figure out ways to deliver what government hasn’t or can’t”…. (R)

“The announcement on Tuesday that Amazon, JPMorgan Chase and Berkshire Hathaway would be joining forces to create a health care company moved stock markets and prompted optimistic predictions of major reform in a notoriously complex industry.
But while the three companies bring successful management, technological expertise and substantial capital to the venture, many health industry experts expressed doubts about whether their results would match their ambition.
Here are a few reasons that experts suggest we temper expectations.
It has been tried before
None of these players have expertise in health care
These are really different companies, with different priorities
There is not a clear strategic incentive to sell whatever they learn.” (S)

THE past decade has seen the smartphone become a portal for managing daily life. Consumers use their pocket computers to bank, buy and befriend. Now this array of activities is expanding into an even more vital sphere. Apple has spent three years preparing its devices and software to process medical data, offering products to researchers and clinical-care teams. On January 24th it announced the result. The next big software update for its iPhone will include a feature, Health Records, to allow users to view, manage and share their medical records. Embedded in Apple’s Health app, the new feature will bring together medical data from participating hospitals and clinics, as well as from the iPhone itself, giving millions of Americans direct digital control of their own health information for the first time.
Alphabet, Google’s parent, has just launched a third health-care firm, Cityblock Health, to operate alongside Verily, a subsidiary based in San Francisco, and DeepMind Health, an arm of its London-based artificial-intelligence (AI) firm (a fourth company, Calico, is working to extend human lifespans, but does not provide health-care services). Alphabet already claims to be able to use AI to predict possible deaths of hospitalised patients two days earlier than current methods, for instance, allowing more time for doctors to intervene. Facebook and Microsoft are preparing to add health care to their core businesses of social networking and software.
Until now the tech giants’ foray into health care has not gone much beyond wearable devices to track fitness or the provision of cloud-computing services to incumbent providers. In future they aim to deliver real medical services that directly affect individual patients. All five firms have secretive health-care skunk works, are hiring medical talent and are buying or backing external health-care startups. Undeterred by recent claims that their own products may be harmful to mental health, they want not only to be indispensable in customers’ lives but to prolong them, too….
It is worth remembering that the prospect of technology firms transforming health care has been heralded in the past, only to disappoint. Google started a health-records initiative in 2008, but shut it down by 2011, citing poor adoption. Microsoft made similar efforts with similarly low take-up. Yet ten years on, the centrality of the smartphone, with its potential to give patients access to their data whenever they want and wherever they are, changes the game.
So too does the inexorable logic of the data economy. Data sets that contain information about human health are hugely valuable. At a time when health-care budgets around the world are stretched, payers are desperate for insights that might enable them to cut costs while maintaining quality. The more data the tech firms can handle, the more they will learn about human health, and the better the services they can offer will become.” (T)

(A) Amazon, Berkshire Hathaway and JPMorgan Team Up to Try to Disrupt Health Care by By NICK WINGFIELD, KATIE THOMAS and REED ABELSON, https://www.nytimes.com/2018/01/30/technology/amazon-berkshire-hathaway-jpmorgan-health-care.html
(B) Can 3 business titans cure the US health care system?, by MARLEY JAY, http://abcnews.go.com/Technology/wireStory/health-cares-amigos-big-names-push-52732342
(C) Have they stumbled upon the solution to America’s health-care woes?, by Guian McKee, https://www.washingtonpost.com/news/made-by-history/wp/2018/02/08/how-three-of-americas-biggest-companies-might-undo-decades-of-conservative-health-care-policy/?utm_term=.0f81128f8835
(D) Disrupted: American healthcare has reached its tipping point, by Alex Kacik and Shelby Livingston, http://www.modernhealthcare.com/article/20180203/NEWS/180209961
(E) If Amazon And Buffett Lift Veil On Health Prices, Insurers Are In Trouble, by Bruce Japsen, https://www.forbes.com/sites/brucejapsen/2018/01/31/if-amazon-and-buffett-lift-veil-on-health-prices-insurers-are-in-trouble/#37662f1141c0
(F) Will Amazon, Berkshire Hathaway and JPMorgan Reinvent Health Care?, by Robert Field and Guian McKee, http://knowledge.wharton.upenn.edu/article/will-amazon-berkshire-hathaway-and-jpmorgan-change-the-game-for-health-care/
(G) What Could Amazon’s Approach to Health Care Look Like?, by Robert S. Huckman, https://hbr.org/2018/02/what-could-amazons-approach-to-health-care-look-like
(H) Amazon: How Its Strengths Could Help It in Health Care, by David Marino-Nachison, https://www.barrons.com/articles/amazon-how-its-strengths-could-help-it-in-healthcare-1518012088
(I) Amazon’s Soaring Healthcare Ambition: The Promise and the Problem, by Rob Enderle, https://www.technewsworld.com/story/85106.html?rss=1
(J) Amazon’s exploratory pharmacy team has ballooned to more than 30 people, says research firm, by Christina Farr and Meg Tirrell, https://www.cnbc.com/2018/01/24/amazon-pharmacy-team-expanded-to-more-than-30-leerink.html
(K) Report: Amazon’s healthcare plans could include a data warehouse, emphasis on digital tools, by Evan Sweeney, https://www.fiercehealthcare.com/mobile/amazon-digital-tools-technology-health-data-warehouse-telemedicine
(L) Employer Health Insurance: Often-Hated, Sometimes Pioneering, and Now on Amazon’s Radar, by Margot Sanger-Katz, https://www.nytimes.com/2018/02/01/upshot/employer-health-insurance-amazon-berkshire-hathaway.html
(M) Hospital Impact—Amazon, Berkshire Hathaway and JPMorgan venture a wake-up call for healthcare leaders, by Kent Bottles, https://www.fiercehealthcare.com/hospitals/hospital-impact-amazon-berkshire-hathaway-and-jpmorgan-venture-should-be-a-wake-up-call
(N) The fog around the new health care mega-venture, by Bob Herman, https://www.axios.com/bezos-buffett-dimon-health-care-hype-c5390c6e-61f5-4dbf-8c9f-66d5946c37ba.html
(O) Cigna CEO sees Amazon-led employee health initiative as an ‘opportunity’, by Bertha Coombs, https://www.cnbc.com/2018/02/01/cigna-ceo-sees-amazon-led-employee-health-initiative-as-an-opportunity.html
(P) Excited Amazon Will Fix Health Care? Don’t Hold Your Breath, Says Harvard Expert, by Jessica Stillman, https://www.inc.com/jessica-stillman/harvard-healthcare-analyst-amazons-healthcare-efforts-are-going-exactly-nowhere.html
(Q) Is the Amazon health-care venture enough to make a big enough splash?, by KELLY BARNES, http://thehill.com/opinion/healthcare/372988-is-the-amazon-health-care-venture-enough-to-make-a-big-enough-splash
(R) Editorial: Can Bezos, Buffett and Dimon revolutionize American health care?, http://www.chicagotribune.com/news/opinion/editorials/ct-edit-dimon-amazon-health-care-20180205-story.html
(S) Can Amazon and Friends Handle Health Care? There’s Reason for Doubt, by MARGOT SANGER-KATZ and REED ABELSON, https://www.nytimes.com/2018/01/30/upshot/can-amazon-and-friends-handle-health-care-theres-reason-for-doubt.html?ribbon-ad-idx=4&rref=world&module=ArrowsNav&contentCollection=The%20Upshot&action=swipe&region=FixedRight&pgtype=article
(T) Apple and Amazon’s moves in health signal a coming transformation, https://www.economist.com/news/business/21736193-worlds-biggest-tech-firms-see-opportunity-health-care-which-could-mean-empowered

Novel strategies often “appear” full blown. Sometimes they appear to be counterintuitive. Often there seem to be conflicting ideas out there. New players enter the competition. There is no continuum within which to place different initiatives.
So DOCTOR is taking a break to try to learn more and perhaps might come back “disruptively”!
Here are some examples I have found in the past few weeks to get myself started.
Jonathan

“What I hear is providing insights into what issues will be top of mind with healthcare leaders in 2018. Thus, here’s a short list of delivery trends to watch for in the coming year:
1. Efficiency will become a top priority. Revenues are flat while expenses continue to rise for most medical providers, so medical groups and health systems must continue to make their practices more efficient…
2. Physician burnout will be a strategic imperative. Addressing physician burnout will become a priority in the boardroom as leaders will demand initiatives to stem this epidemic. Many will add burnout metrics to their dashboards…
3. Competition for convenience will heat up. Patients—especially millennials—will continue to drive the demand for quicker, more accessible options to receive care..
4. Scope-of-practice issues will become more acute. The underutilization of many healthcare professionals―including pharmacists, nurses, physician assistants or behavioral health specialists―will lead to increased demands to expand their ability to treat patients more autonomously…
5. Practices will form more community partnerships. The move to value-based payment systems and the accountability for an attributed population means that healthcare systems will need to work with community partners to address some of the root causes of poor outcomes and resultant higher costs…” (A)

“Medicine currently follows the capitalistic model of other American industries: A fee is paid whenever a service or good is delivered. This incentive-based approach works well in most every industry, but not in health care. Fee-for-service encourages more tests and treatments, some of which are completely unnecessary. More health care does not mean better health care.
Instead of volume, we need to incentivize value by rewarding better health outcomes resulting from efficiently delivered, proactive care that keeps patients healthy.
When providers are incentivized to maintain health rather than respond to illness, they treat patients earlier in low-cost environments, like neighborhood clinics, before health problems become serious and require expensive care in a hospital setting. Those who can deliver more value by keeping patients healthy should be able to share in the savings of the health-care expenditures they have reduced.
Providers who spend more than would normally be expected for a given patient should receive no incentive payments. Furthermore, in this shift to value, there is appropriate fiscal support and incentive for the care that needs to happen in between physician visits (for example, disease education, health coaching and other ongoing care-management work). In this kind of system, the interests of payers, providers and patients become aligned.
Keeping patients healthy and out of the hospital
It can be done. Kaiser Permanente, which serves patients in eight states and the District of Columbia, combines hospitals and outpatient clinics with its own nonprofit insurance plan. Kaiser has a fixed annual amount to care for each member, so there is an inherent incentive to keep patients healthy and out of the hospital, where care is most expensive. Because its structure aligns the interests of payers, providers and patients, Kaiser operates efficiently and they are not alone. In fact, many other health systems, including the Mount Sinai Health System, are creating the same incentive model in partnership with private health plans.
By integrating the mobile and digital technology that is part of our everyday lives, medicine will be able to lower the number of hospital admissions….
Taken one step further, the Hospital at Home concept, which Mount Sinai Health System began in 2014, allows patients to be monitored closely from their own bedrooms and receive daily visits from a doctor or nurse practitioner, as well as home nursing care, lab services and medical equipment in their home, which is far less costly than remaining in the hospital…” (B)

“Oscar Health said its partnership with the Cleveland Clinic to offer individual coverage in Ohio under the Affordable Care Act has greater market share than anticipated in its first year.
The New York-based startup, which has expanded Obamacare offerings this year to more states, said it enrolled more than 11,000 members in its co-branded health plans with the Cleveland Clinic. Executives said the enrollment was higher than expected and accounts for about 15% of the individual health insurance market in the five-county northeast Ohio area. Oscar Health’s total enrollment is up 150% , or more than 250,000, after expanding into several new markets including the Cleveland area.
The enrollment is significant in part because individual health plans need enough customers for their risk pools, paying claims of sick patients and leaving enough to turn a profit and invest in product offerings. Bigger carriers including Anthem, Aetna and UnitedHealth Group scaled back their Obamacare offerings for 2018 after being unable to manage the rising costs of sick patients purchasing coverage.
The Cleveland Clinic-Oscar Health partnership is being watched closely as providers take on more financial risk in forming closer ties with insurance companies. CVS Health and Aetna are expected to offer more co-branded health plans once their deal closes later this year while Blue Cross and Blue Shield plans are also offering an increasing number of plans branded with providers in local markets.
Cleveland Clinic and Oscar describe their partnership as “a true 50/50 profit sharing of premium revenue.” Though early in their first year of operation, executives said one out of three Oscar health plan members have “already chosen a Cleveland Clinic primary care physician through Oscar health’s onboarding platform online.” (C)

“For years, hospital executives have expressed frustration when essential drugs like heart medicines have become scarce, or when prices have skyrocketed because investors manipulated the market.
Now, some of the country’s largest hospital systems are taking an aggressive step to combat the problem: They plan to go into the drug business themselves, in a move that appears to be the first on this scale.
“This is a shot across the bow of the bad guys,” said Dr. Marc Harrison, the chief executive of Intermountain Healthcare, the nonprofit Salt Lake City hospital group that is spearheading the effort. “We are not going to lay down. We are going to go ahead and try and fix it.”
While Intermountain executives would not name the drugs they intend to make, hospitals have long experienced shortages of drugs like morphine or encountered sudden price increases for old, off-patent products like the heart medicine Nitropress. Hospitals have also come under criticism for overcharging for their services, including for some drugs.
Several major hospital systems, including Ascension, a Catholic system that is the nation’s largest nonprofit hospital group, plan to form a new nonprofit company, that will provide a number of generic drugs to the hospitals. The Department of Veterans Affairs is also expressing interest in participating.
In all, about 300 hospitals are now included in the group. Other hospitals are expected to join.
Dr. Harrison said they planned to focus only on certain drugs. “There are individual places where there are problems,” he said. “We are not indicting an entire industry.”
Dr. Kevin A. Schulman, a professor of medicine at the Duke University School of Medicine who has studied the generic drug market and is advising the effort, said: “If they all agree to buy enough to sustain this effort, you will have a huge threat to people that are trying to manipulate the generic drug market. They will want to think twice.”
The idea is to directly challenge the host of industry players who have capitalized on certain markets, buying up monopolies of old, off-patent drugs and then sharply raising prices, stoking public outrage and prompting a series of Congressional hearings and federal investigations. The most notorious example is of Martin Shkreli, the former hedge fund manager who raised the price of a decades-old drug, Daraprim, to $750 a tablet in 2015, from $13.50…”(D)

“The shift toward consumerization in health insurance got rolling with passage of the Affordable Care Act in 2009 and has been gradually gaining speed since then. Now, retail giant CVS’s $69 billion agreement to buy Aetna has put a brick on the accelerator of consumerization in this space.
One driving force behind the CVS-Aetna deal may be the fear that Amazon, the e-commerce juggernaut from Seattle, is plotting a conquest of the pharmacy business. Whatever CVS’s motivations, its entry into the health insurance marketplace will force the industry to become more consumer friendly. That means injecting a huge dose of technology — especially data-analytics technology — along with marketing know-how into a business that has traditionally resisted change and innovation.
CVS will bring Aetna not only a wealth of consumer experience and relationships but also a level of technological savvy that the health insurance industry has never seen. The combined entity will possess massive amounts of data about Aetna’s members. It shouldn’t take long before CVS brings technology to bear that can help Aetna members better manage their prescription medicines, steer them toward CVS’s in-store care clinics, and offer vastly improved tools for managing their care and insurance online.
The deal will leave competing health insurance executives with no choice but to modernize their offerings and provide a user experience that approaches the standards set in the retail and consumer worlds….” (E)

“In that burst of activity, three transactions are of particular note: CVS Health’s (CVS) proposed acquisition of insurance giant Aetna (AET); Humana’s (HUM) intention to take a minority stake in Kindred (KND), a home health and hospice company; and UnitedHealth Group’s (UNH) plan to acquire Colorado-based DaVita’s (DVA) primary and urgent care business.
Interestingly, all of these combinations have a common goal: Keep patients out of high-cost hospitals by providing alternative care settings.
To understand the most recent wave of health care deals and the effect they may have on consumers, it’s important to understand the backdrop, explained Andrea Harris, senior healthcare analyst at Height Securities and a former staffer at the U.S. Department of Health and Human Services. For years, hospitals have been consolidating across the country, and the trend continued with a slew of big regional deals announced in 2017. In many areas, hospitals are now concentrated enough to dictate prices to even the biggest insurance company payers, said Harris
In part to fight back, insurers tried, unsuccessfully, to undergo their own wave of consolidation back in 2016. That’s when mega-insurers Aetna and Humana and Cigna (CI) and Anthem (ANTM) proposed merging, but both deals were blocked by the Department of Justice.
Now the trend has turned toward integrating other types of health care providers and systems in an effort to provide relief from high-cost hospital care, Harris explained. These deals are less likely to face regulatory scrutiny because insurers are expanding their businesses into areas that cause little overlap in services.
The most dramatic example is the $69 billion CVS-Aetna transaction. The hope is the merged companies would provide a willing group of patients to use CVS’ local clinics and disease management services to avoid hospital visits. By the same token, Humana wants a piece of Kindred so it can provide home health services to customers who might otherwise go to the hospital. And UnitedHealth’s alliance with DaVita will add 300 clinics in six states to UnitedHealth’s network of urgent care centers….” (F)

The renovation and expansion of Lucile Packard Children’s Hospital Stanford has been in the works for more than a decade, and this month it moved patients into the new facility for the first time.
The goal of the redesign was to create a facility with patients—and caregivers—in mind, said CMO Dennis Lund, M.D., the hospital’s chief medical officer, in an interview with FierceHealthcare. The hospital has gardens for patients and families alongside balconies and quiet spaces for clinical workers to take a breather.
“That’s especially important,” Lund said. “We can’t have successful patient care if we don’t have happy and satisfied staff.”
When the hospital first opened in 1991, it was designed to serve as a space where children could recover from care, not necessarily as a destination for pediatric care, Lund said. The original facility did not offer imaging services or have any operating rooms, so patients were sent to the adjacent Stanford University Medical Center.
As Lucile Packard began to expand its portfolio, adding complex procedures like transplantation and advanced cancer care, the need for a larger and more advanced space become evident. The new hospital is 521,000 square feet, more than double the previous children’s and obstetrics facility, and has added 149 beds for a total of 361 on the Palo Alto campus.
Alongside spaces designed to ease the stress of the care experience, Lucile Packard has expanded and modernized its imaging and treatment centers. Some elements, like new surgical suites and a neuro-interventional lab, are still under construction and set to open next year, the hospital recently announced.
Lund said the new suites will streamline the care process for certain procedures. Having adjoining spaces for different steps along the care journey will make the process faster and requires less anesthesia for the children, he said.
The investment in imaging includes a new positron emission tomography (PET) and MRI machine. The equipment allows clinicians to better craft care plans to a patient’s needs and can allow them to better monitor the spread of disease. It’s the only PET/MRI dedicated to pediatric care in the northern part of California, the hospital said….” (G)

“Dr. Mitchell H. Katz, the new president of NYC Health & Hospitals, is the system’s third leader in four years. Credit NYC Health & Hospitals
The incoming president of NYC Health & Hospitals wants to turn the nation’s largest public health care network into an agency that focuses less on hospitalized care and more on primary care, similar to initiatives carried out nationwide.
The new president, Dr. Mitchell H. Katz, who begins his job on Monday, also said he would expand the use of eConsult, an electronic health management system to streamline care and reduce wait times for specialty appointments, evaluate staff allocation and consider decreasing administrative services such as “unnecessary consultant expenses” to increase savings and revenue.
“I’m all about trying to strengthen public hospitals,” Dr. Katz, the former director of the Los Angeles County Health Agency, said in a recent phone interview. “Public hospitals are incredibly precious. If you don’t look out for them, they’ll disappear.”
Health & Hospitals, a sprawling system of 11 hospitals, five nursing facilities and more than 70 community-based health care centers and extension clinics, faces many challenges: shrinking state and federal funds, a decline in patient population, a large uninsured and underinsured patient population and a funding gap that is expected to balloon to $1.8 billion by the 2020 fiscal year.
In fact, Mayor Bill de Blasio’s administration warned in a report two years ago that the system was “on the edge of a financial cliff” and proposed restructuring and increased city subsidies.
“This is a deficit operation,” said Stanley Brezenoff, the system’s former interim chief executive. “You’re finding ways to close gaps.”
But more needs to be done to “reinvent and remodel the delivery system of Health & Hospitals,” Mr. Brezenoff said. “We have a long way to go.”” (H

“New Jersey is now home to two mega health care systems, which account for nearly half of all acute care hospitals in the state.
But declaring one the biggest in the state is difficult.
Hackensack Meridian Health said it was in the top spot after officially announcing JFK Health has joined the system last Wednesday.
But it is difficult to determine what numbers back that claim up.
HMH, with JFK joining its network, will have a total of 16 hospitals, 4,520 beds and employs nearly 33,000, including 6,500 staff physicians.
RWJBarnabas Health, which was previously touted as the largest system in the state, also has a total of 16 hospitals, 5,066 beds, 33,000 employees, plus 9,000 physicians.
HMH now has a total of 160 locations of all kinds in New Jersey. RWJBarnabas said it has 242 licensed patient care locations.
Both are claiming annual revenues at or near $5.5 billion…” (I)

“The City Council is attempting to recuperate millions of dollars from tax-exempt property owned by the Hackensack University Medical Center.
The city has filed an omitted assessment appeal for the non-profit hospital and its properties. By filing the appeal, the city wants to prompt negotiations with Hackensack Meridian Health, which owns the city hospital. City officials want to have the company pay some of the estimated $19 million in tax dollars it would owe the city if its land was not exempt from property taxes.
“There’s a lot of pressure on these hospitals at this time to make some payment of taxes to the host communities,” said Art Carlson, the city’s tax assessor. “We realize that the hospital is a great asset to the city, but that doesn’t preclude it from some kind of payments in lieu of taxes being assessed.”
Mayor John Labrosse declined to comment on the city’s appeal, citing his employment as a safety specialist at the hospital. Nancy Radwin, a Hackensack Meridian Health spokeswoman, declined to comment.
The appeal comes in the wake of a landmark tax court decision against the Morristown Medical Center in 2015. In a years-long case, Morristown council sought payments from tax appeals it filed against the hospital as far back as 2006. The hospital’s designation as a tax-exempt, charitable institution had shielded it from paying taxes on the properties it owned in town.
Ultimately, Judge Vito Bianco ruled that the medical center ran more like a for-profit corporation than a non-profit, charitable institution.
In a 2016 settlement, the hospital agreed to pay Morristown $15.5 million for 10 years of taxes and interest. The hospital also agreed to pay additional taxes for 10 years on spaces leased to restaurants, shops and private doctors. (J)

“Fairview Health Services CEO James Hereford called Epic Systems Corp. an “impediment to innovation” and said there is an opportunity for health care executives to exert more influence over the Wisconsin-based electronic-medical-records giant.
Epic, a privately held company with about $2.5 billion in annual revenue, is a dominant player in the EMR business and counts most major Twin Cities health systems among its clients. (Outside the metro area, Mayo Clinic is spending more than $1 billion to migrate all its medical records onto Epic’s platform.)
“I will submit that one of the biggest impediments to innovation in health care is Epic, because the way that Epic thinks about their [intellectual property] and the IP of others that develop on that platform,” Hereford said at a panel discussion hosted by the Business Journal last week. “There are literally billions of dollars in the Silicon Valley chasing innovation in health care. And Yet Epic has architected an organization that has its belief that all good ideas are from Madison, Wisconsin. And on the off chance that one of us think of a good idea, it’s still owned by Madison, Wisconsin.”
Epic is headquartered in Verona, which is about 10 miles from Madison.
Hereford spoke on a panel made up of CEOs from Twin Cities health care organizations such as HealthPartners Inc., Medica and Summit Orthopedics. He said health care executives collectively could do more to encourage Epic to change its approach.
“There is an opportunity for us to go to Epic and say, ‘Look, you have to open up this platform,’ ” he said. “It’s for our benefit in terms of having an innovative platform where all these bright, amazing entrepreneurs can actually have access to what is essentially 80 percent of the U.S. population that is cared for within an Epic environment. I would love for us to get together to see how we march on Madison.”
Critics have long argued that Epic takes an overly closed-off approach to its software, hindering the sharing of data to outside organizations and patients, as well as between health care providers…” (K)

“Amazon is looking to hire an expert in a set of health privacy regulations known as HIPAA, according to a new job listing.
The company is looking for a professional who can “own and operate” the security and compliance aspects of a new initiative. The person will also ensure that it meets HIPAA business associate agreement requirements, meaning Amazon intends to work with outside partners that manage personal health information.
It is also hoping the new hire will provide a consultative resource for all health-care regulatory issues.
Amazon is the latest technology company, after Apple and Alphabet, to make moves in health care. As CNBC reported in spring 2017, the company strategized how it could carve out a slice of the multibillion-dollar pharmacy market. It also has a health-care team at Amazon.com in Seattle, known by many names including “1492.”
One more immediate reason that Amazon might be looking for a health privacy expert is to augment its efforts to bring its Alexa voice assistant to health care.
The technology is not yet HIPAA compliant, which means developers aren’t able to record patients’ lab results or other types of health information in a clinical setting.
Amazon Web Services’ health lead acknowledged the gap in September at an event to promote Alexa in hospitals. “While Alexa and Lex (the technology powering Alexa) are not HIPAA-eligible, this (challenge) has provided us an opportunity to envision what is possible,” she said.
In the summer, Amazon hired Missy Krasner, herself an expert in health policy, who formerly ran Box’s health care initiatives.” (L)

“If you’ve ever struggled to access your medical information, like a lab test or immunization, Apple is trying to make your life easier.
On Wednesday, the company is releasing the test version of a new product that lets users download their health records, store them safely and show them to a doctor, caregiver or friend.
“We view the future as consumers owning their own health data,” Apple Chief Operating Officer Jeff Williams said in an interview with CNBC.
It all works when a user opens the iPhone’s health app, navigates to the health record section, and, on the new tool, adds a health provider. From there, the user taps to connect to Apple’s software system and data start streaming into the service. Patients will get notified via an alert if new information becomes available.
In June, CNBC first reported on Apple’s plans, including early discussions with top U.S. hospitals. The company confirmed that it has contracts with about a dozen hospitals across the country, including Cedars-Sinai, Johns Hopkins Medicine, Penn Medicine and the University of California, San Diego.
The medical information available will include allergies, conditions, immunizations, lab results, medications, procedures and vitals. The information is encrypted and protected through a user’s iPhone passcode.”…(M)

“Google CEO Sundar Pichai believes artificial intelligence could have “more profound” implications for humanity than electricity or fire, according to recent comments.
Pichai also warned that the development of artificial intelligence could pose as much risk as that of fire if its potential is not harnessed correctly.
“AI is one of the most important things humanity is working on,” Pichai said in an interview with MSNBC and Recode, set to air on Friday, January 26. “It’s more profound than, I don’t know, electricity or fire.”
Pichai went on to warn of the potential dangers associated with developing advanced AI, saying that developers need to learn to harness its benefits in the same way humanity did with fire.
“My point is AI is really important, but we have to be concerned about it,” Pichai said. “It’s fair to be worried about it—I wouldn’t say we’re just being optimistic about it— we want to be thoughtful about it. AI holds the potential for some of the biggest advances we’re going to see.
“Whenever I see the news of a young person dying of cancer, you realize AI is going to play a role in solving that in the future. So I think we owe it to make progress too.”” (N)

“Reducing diagnostic errors is a crucial component of improving care quality, but current methods of monitoring such mistakes may be time consuming. Now, researchers at Johns Hopkins have developed a strategy that uses big data to speed up the process.
David Newman-Toker, M.D., director of the Center for Diagnostic Excellence at Johns Hopkins’ Armstrong Institute for Patient Safety and Quality, and his team developed a new approach called SPADE (Symptom-Disease Pair Analysis of Diagnostic Error) to allow providers to harness databases instead of having staff members comb medical records for more information, according to a study published in BMJ Quality & Safety.
SPADE uses statistical analyses to find and flag patterns that can predict diagnostic errors. It mines available databases for common symptoms that lead patients to visit a doctor and then compares those data with diseases that are often misdiagnosed.
For example, SPADE would illustrate how frequently patients who visit a provider with dizziness are sent home because doctors believe the condition is minor, when they had actually suffered a stroke, Newman-Toker said in an announcement. Having these data available would improve outcomes and could refine quality measures to better reflect patients’ concerns.
“Being able to do that using big data is an important innovation for diagnostic quality and safety,” he said.
Diagnostic errors are an industry-wide issue. A recent Mayo Clinic study suggested that more than 20% of patients are misdiagnosed by their primary care doctors. Physicians can mitigate the risk by seeking out a second opinion or taking a “time out” prior to surgery to ensure the correct patient is on the operating table.
SPADE’s approach is likely to be most effective with acute or subacute conditions for which a misdiagnosis could have serious consequences: hospitalization, disability or death within six months. Newman-Toker said it would likely be effective for the “big three” conditions that lead to death or disability after a diagnostic error: infections, cancer or vascular events.” (O)

Consolidation is one of the most important trends shaping the healthcare industry today, but hospital and health system leaders rarely approach these ambitious actions with a clear sense of what makes an effective deal. Though partnerships, affiliations and joint ventures have become increasingly prevalent, as well as the acquisition of ambulatory service centers and other outpatient facilities, this article will focus on the mechanics of hospital acquisition.”
As president and CEO of Northwell Health, I have seen our health system expand to 23 hospitals. From my experience, I can say there are four essential factors to consider before pursuing a hospital acquisition.
Is the mission of the hospital you are in discussions with consistent with yours?
Would the acquisition add value to your organization?
What is the relative health of the hospital you are targeting? That encompasses not only financial health, but its reputation for clinical quality, its standing in the community, and the political dynamics of the hospital’s governing board and leadership team. Understanding a hospital from a holistic standpoint requires a full diagnostic analysis.
Does the deal help you competitively? And what are the repercussions if one of your competitors acquires the hospital instead?
Three red flags
There are three red flags we always examine when looking to acquire a hospital.
Lack of transparency. If leaders are not fully transparent with you, they are trying to hide something.
Micromanagement by the governing board. If the board doesn’t allow its management team to oversee day-to-day operations without interference, you could have major problems. Ask yourself if you can change that culture, and if so, how difficult would it be? How can you make a board understand its responsibility to hold management accountable but not insert itself in day-to-day management?
Long-term contracts with physicians and administrators. If contracts with clinical and administrative leaders are long and unbreakable, you could have trouble making changes and recruiting a new team if problems arise.
If you go back 10 years and look at the C-suites of hospitals Northwell has acquired, few of the same leaders are around today. Sometimes you need to make leadership changes quickly because the incumbents may be poisonous to the transition process. Other times, we have found leaders of newly acquired facilities to be very adaptable and open to change. The same standards must also be applied to physician leadership…
Consolidation is an essential and beneficial move if you want to provide broad-based, holistic, coordinated care. If your main priority is improving patient outcomes, the advantages of consolidation outweigh its disadvantages. However, organizations that simply collect hospitals without properly integrating them or coordinating care are destined for failure. There are many health systems that are simply a collection of points on a map — freestanding silos independent of each other. The concept behind effective acquisition should be preventing duplication and enhancing efficiency, because if your only aim is to make yourself look big, employees and patients will be the ones to suffer.” (P)

Sanford Health is expanding its presence in international health care by extending services to seven countries. This year, Sanford Health will enter New Zealand, Ireland, Vietnam, Costa Rica and South Africa and increase its presence in China and Ghana. This expansion follows last year’s acquisition of a minority stake in ISAR Klinikum, a hospital leader in stem cell therapies, located in Munich, Germany.
Sanford Health’s international health care arm, Sanford World Clinic, will now be in nine countries with more than 30 locations. Supported by philanthropy and launched in 2007, the initiative is designed to foster partnership with health care leaders in the development of sustainable services around the world.
“With these partnerships, we are creating unique opportunities for shared learning,” said Kelby Krabbenhoft, president and CEO of Sanford Health. “This is not something we are pursuing for financial gain, but we believe this type of collaboration will help further our mission of health and healing.”
Each partnership is unique in terms of scope of service and type of agreement. The focus of the collaborations range from primary and pediatric care to research and health system operations.
“We want to go where we can be impactful and create partnerships that will stand the test of time,” said Dan Blue, M.D., executive vice president of Sanford World Clinic. “We have outstanding partners in each of these countries who share a common goal – to advance health care around the world.”… (Q)

“When most hospitals close, it’s plain to see. Equipment and fixtures are hauled out and carted away. Doctors and nurses leave and buildings are shuttered, maybe demolished.
But another fate befalling U.S. hospitals is almost invisible. Across the country, conglomerates that control an increasing share of the market are changing their business models, consolidating services in one regional “hub” hospital and cutting them from others.
In recent years, hospitals across the country have seen their entire inpatient departments closed — no patients staying the night, no nursery, no place for the sickest of the sick to recover. These facilities become, in essence, outpatient clinics.
Hospital executives see these cuts as sound business decisions, and say they are the inevitable consequence of changes in how people are using medical services. But to patients and local leaders who joined forces with these larger health networks just years ago, they feel more like broken promises: Not only are they losing convenient access to care, their local hospitals are also getting drained of revenue and jobs that sustain their communities.
“It’s not even just betrayal. It’s disgust, frankly,” said Mariah Lynne, a resident of Albert Lea, Minn., where Mayo Clinic is removing most inpatient care and the birthing unit from one of its hospitals. “Never would I have expected a brand of this caliber to be so callous.”
In 2015, the most recent year of data, these service reductions accounted for nearly half of the hospital closures recorded around the country, according to the Medicare Payment Advisory Commission. (By MedPac’s definition, the loss of inpatient wards is equivalent to closure.) These data do not capture more discreet closures of surgical and maternity units that are also happening at local hospitals.
And the trend doesn’t just affect nearby residents. It represents a slow-moving but seismic shift in the idea of the community hospital — the place down the street where you could go at any hour, and for any need. Does the need for that hospital still exist, or is it a nostalgic holdover? And if it is still needed, is it economically viable?”…(R)

(A) Hospital Impact―Ear to the ground: 5 healthcare delivery trends to watch in 2018, by Jerry Penso, https://www.fiercehealthcare.com/hospitals/hospital-impact-5-healthcare-delivery-trends-to-watch-2018?mkt_tok=eyJpIjoiWm1OaFptWmtOVFF5TjJFMiIsInQiOiJyd1FIakxTZ1lONWJzU3FpVjBHdUFnWHhBR0EwdEdkNllGMDlSUEl4bVFQazBNVGsya2V3cGpiMlRlak4ydHdqWFBPNFQ0U0VrbDc1a1dSZDNwdGY0YUFlTW00UWxNblpXODNvQ2g4bHBmT0pxNk1adVQ3VXlJc0ZiUDM2a2RvWCJ9&mrkid=654508
(B) The real reason health care is bankrupting America, by Kenneth L. Davis, https://www.cnbc.com/2018/01/11/the-real-reason-health-care-is-bankrupting-america.html
(C) Oscar Health Grabs Share With Cleveland Clinic Branded Obamacare Plan, by Bruce Japsen, https://www.forbes.com/sites/brucejapsen/2018/01/19/oscar-health-grabs-share-with-cleveland-clinic-branded-obamacare-plan/#7d9334f4f468
(D) Fed Up With Drug Companies, Hospitals Decide to Start Their Own, by REED ABELSON and KATIE THOMAS, https://www.nytimes.com/2018/01/18/health/drug-prices-hospitals.html
(E) Innovative health insurers must learn to think like Amazon, by MARK NATHAN, https://www.statnews.com/2018/01/10/health-insurance-amazon/?utm_source=STAT+Newsletters&utm_campaign=b3b9ddbb62-On_Call&utm_medium=email&utm_term=0_8cab1d7961-b3b9ddbb62-150519373
(F) What health care companies are doing for their health, by WALECIA KONRAD, https://www.cbsnews.com/news/what-health-care-companies-are-doing-for-their-health/
(G) A look inside Lucile Packard’s new 521K-square-foot ‘patient-centered’ hospital, by Paige Minemyer, https://www.fiercehealthcare.com/healthcare/lucile-packard-children-s-hospital-stanford-renovation-new-facility-pediatrics-imaging?mkt_tok=eyJpIjoiWm1OaFptWmtOVFF5TjJFMiIsInQiOiJyd1FIakxTZ1lONWJzU3FpVjBHdUFnWHhBR0EwdEdkNllGMDlSUEl4bVFQazBNVGsya2V3cGpiMlRlak4ydHdqWFBPNFQ0U0VrbDc1a1dSZDNwdGY0YUFlTW00UWxNblpXODNvQ2g4bHBmT0pxNk1adVQ3VXlJc0ZiUDM2a2RvWCJ9&mrkid=654508
(H) City’s New Public Hospitals Chief Will Focus on Primary Care, by JAN RANSOM, https://www.nytimes.com/2018/01/07/nyregion/mitchell-katz-nyc-health-hospitals.html
(I) HMH and RWJBH: 2 big systems, but which is bigger?, by Anjalee Khemlani, http://www.roi-nj.com/2018/01/08/healthcare/hmh-rwjbh-two-big-systems-one-bigger/
(J) Hackensack University Medical Center’s tax exemption appealed by City Council, by Rodrigo Torrejon, https://www.northjersey.com/story/news/bergen/hackensack/2018/01/18/hackensack-university-medical-center-tax-exemption-appealed-city-council/1041144001/
(K) Fairview CEO says Epic an ‘impediment’ to innovation, calls for ‘march on Madison’, by Katharine Grayson, https://www.bizjournals.com/twincities/news/2018/01/16/fairview-ceo-says-epic-an-impediment-to.html
(L) Amazon is hiring a health privacy expert for ‘new initiative’, by Christina Farr, https://www.cnbc.com/2018/01/16/amazon-hiring-hipaa-expert.html
(M) Apple will let you keep your medical records on your iPhone or Apple Watch, by Christina Farr, https://www.cnbc.com/2018/01/24/apple-coo-williams-says-new-health-record-beta-is-right-thing-to-do.html
(N) WHAT’S BIGGER THAN FIRE AND ELECTRICITY? ARTIFICIAL INTELLIGENCE, SAYS GOOGLE BOSS, by ANTHONY CUTHBERTSON, http://www.newsweek.com/artificial-intelligence-more-profound-electricity-or-fire-says-google-boss-786531
(O) Johns Hopkins researchers use big data analytics to target diagnostic errors, improve quality, by Paige Minemyer, https://www.fiercehealthcare.com/healthcare/johns-hopkins-armstrong-institute-diagnostic-errors-spade-big-data?mkt_tok=eyJpIjoiWldReE4yUmtObU14TXpKaiIsInQiOiJaQ2NRZnFzdlwvRDVKYmV2Y2h2UDRnWTArbUxicCszKzlJVDg0TDJDWU53a21CMW9PdGlscm9aN1VEVDJmdEJMdWlXZHVRVkl5UXlJdGVXdXJXUjVmZEpjR1wvV2ltWVwvK2I5b2xGd2ZtSERZRzJBMDJBOVBveHNRSU9vUXlFQVwvVWcifQ%3D%3D&mrkid=654508
(P) Michael Dowling: The prizes and pitfalls of hospital acquisitions, by Michael J. Dowling, https://www.beckershospitalreview.com/hospital-management-administration/michael-dowling-the-prizes-and-pitfalls-of-hospital-acquisitions.html
(Q) Sanford Health increases global presence with expansion in seven countries, http://www.sanfordhealth.org/newsroom/2018/01/sanford-health-increases-global-presence-with-expansion-in-seven-countries
(R) Paying more and getting less: As hospital chains grow, local services shrink, CASEY ROSS, https://www.statnews.com/2018/01/24/hospital-chains-services-consolidation/